Mainstreaming aquatic restoration using Nature-based Solutions
Abstract
1. Mainstreaming aquatic restoration using Nature-based Solutions (NbS) requires involving all relevant stakeholders and understanding their connection with rivers and wetlands. We work with six economic ‘MERLIN’ sectors (Agriculture, Hydropower, Insurance, Navigation, Peat Extraction and Water Supply and Sanitation). 2. Our data suggests these sector actors are aware of the environmental and socio-economic challenges arising from degraded freshwater ecosystems and are aware of the types of NbS that MERLIN will demonstrate and implement. However, not all sector actors were convinced of the need for radical change/transformation or that they could rely on NbS to deliver their sector needs. 3. The language of NbS is not well embedded (yet) with these sectors, however concepts of sustainability and working with nature are well understood. With its focus on meeting societal goals, NbS can address the sectors’ concerns about balancing environment, social and economic objectives. 4. The sectors are seeking evidence regarding the benefits of NbS to their sector, concrete examples of NbS at the catchment scale and assistance to integrate sectoral concerns into spatial catchment management. 5. There are strong interdependencies and synergies between the MERLIN sectors. However, there are also potential trade-offs and challenges. We are building a Community of Practice to support an understanding of NbS, how we can enable mainstreaming of NbS in the six MERLIN sectors, and most importantly, how the sectors can work together.
Full text
Deliverable D4.1: Mainstreaming aquatic restoration using Nature-based Solutions Briefing on national / EU sector perceptions, workshops, and tailored briefings per sector
Imprint The MERLIN project (https://project-merlin.eu) has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 101036337. Lead contractor: World Wildlife Fund, James Hutton Institute Contributors: Anna Bérczi-Siket, Kirsty Blackstock, Esther Carmen, Mia Ebeltoft, Tamas Gruber, Eva Hernandez Herrero, Merijn Hougee, Alhassan Ibrahim, Solen le Clech, Elena Lopez-Gunn, Veronica Manzon, Silke Nauta, Fanni Nyírő, Sanja Pokrajac, Viola Saliasi, Andrea Samu, Audrey Vion Loisel, Jana Vítková (authors of the WP4 MERLIN team) To be cited as: Bérczi-Siket A., Blackstock K., Carmen E., Ebeltoft M., Gruber T., Hernandez Herrero E., Hougee M., Ibrahim A., le Clech S., Lopez-Gunn E., Manzon V., Nauta S., Nyírő F., Pokrajac S., Saliasi V., Samu A., Vion Loisel A. and Vítková J., 2023. Mainstreaming aquatic restoration using Nature-based Solutions. EU H2020 research and innovation project MERLIN deliverable 4.1. 63 pp. https://project-merlin.eu/outcomes/deliverables.html Acknowledgements: The MERLIN team is very grateful for the energy, information and guidance provided by those who attended the Round Table Discussions; spoke to us in interviews, responded to the questionnaire and commented on our draft briefings. We are also grateful for the useful feedback we’ve received from the MERLIN Steering Group and our sectoral partners Naturland, BfG representing PIANC, I-Catalist, International Peatland Society and Aqua Publica Europa. Due date of deliverable: 30th November 2022 Actual submission date: 8 December 2022 – Revision: 5 October 2023
MERLIN Deliverable D4.1 I Page 1 MERLIN Key messages 1. Mainstreaming aquatic restoration using Nature-based Solutions (NbS) requires involving all relevant stakeholders and understanding their connection with rivers and wetlands. We work with six economic ‘MERLIN’ sectors (Agriculture, Hydropower, Insurance, Navigation, Peat Extraction and Water Supply and Sanitation). 2. Our data suggests these sector actors are aware of the environmental and socio-economic challenges arising from degraded freshwater ecosystems and are aware of the types of NbS that MERLIN will demonstrate and implement. However, not all sector actors were convinced of the need for radical change/transformation or that they could rely on NbS to deliver their sector needs. 3. The language of NbS is not well embedded (yet) with these sectors, however concepts of sustainability and working with nature are well understood. With its focus on meeting societal goals, NbS can address the sectors’ concerns about balancing environment, social and economic objectives. 4. The sectors are seeking evidence regarding the benefits of NbS to their sector, concrete examples of NbS at the catchment scale and assistance to integrate sectoral concerns into spatial catchment management. 5. There are strong interdependencies and synergies between the MERLIN sectors. However, there are also potential trade-offs and challenges. We are building a Community of Practice to support an understanding of NbS, how we can enable mainstreaming of NbS in the six MERLIN sectors, and most importantly, how the sectors can work together.
MERLIN Deliverable D4.1 I Page 2 MERLIN Executive Summary Our research has highlighted that there is a shared awareness that the freshwater environment is under threat and that the European Green Deal provides a supportive agenda to address these threats. In MERLIN we focus on how to mainstream freshwater restoration through Nature-based Solutions (NbS) in order to develop solutions for both nature and society, in the spirit of the Green Deal. NbS require the engagement of all relevant stakeholders including the economic sectors that affect, and are affected by, interventions in our freshwater ecosystems. We focus on Agriculture, Hydropower, Insurance, Navigation, Peat Extraction and Water Supply and Sanitation Sectors, but other sectors, including the finance sector, are also important. Our data suggests these sector actors are aware of the environmental and socio-economic challenges arising from degraded freshwater ecosystems and are aware of the types of NbS that MERLIN will demonstrate and implement. However, not all sector actors were convinced of the need for radical change or that they could rely on NbS to deliver their sector needs. Our challenge is to illustrate how using NbS can advance the Green Deal goals, given that most actors were supportive of the overall vision. Roles and responsibilities remain unclear and some sectors (Agriculture, Hydropower, Peat Extraction) are more involved in implementing NbS within their own properties than others that mainly rely on the ‘downstream’ benefits (Insurance, Navigation, Water Supply and Sanitation). Some intraand intersectoral tensions were identified; and there are still questions about how to support collective action at the catchment scale to coordinate different actors involved in water management and use. Sectors were concerned about how NbS will balance economic, environmental and social objectives and how ‘burden-sharing’ of restoring nature will be governed. There were concerns about impacts on business profitability but also about wider tradeoffs e.g. with food or energy security. These are opportunities to show how true NbS address societal goals over the longer term, in ways that should help businesses become more resilient to the pressure of climate and other changes. Policies can play a stronger role in supporting NbS and integrated water management. There are also opportunities to value working with nature through certification and value chains; and to harness innovative finance to work at scale and at pace. The approach in MERLIN aligns with the IUCN principles for NbS but there is still a long way to go, due to the challenges outlined above. This is our baseline from which we will engage representatives from the six MERLIN sectors on some prioritised areas for cooperation around provision of evidence, policy and value chain recommendations, implications for social justice and networking. The MERLIN Academy can support this with resources to respond to concerns over information and training. Most importantly, we are building a Community of Practice to try to address the tensions, trade-offs and burden-sharing questions. The robust debates experienced in the development of this briefing illustrates the benefits of such a cross-sectoral and trans-disciplinary forum.
MERLIN Deliverable D4.1 I Page 3 Table of Contents The MERLIN project (https://project-merlin.eu) has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 101036337. 1 Introduction .................................................................................................... 7 2 Cross Sectoral Briefing ............................................................................... 8 2.1 How can MERLIN support transformation ............................................ 8 2.2 Description of the six sectors .................................................................... 9 2.3 Societal challenges for NbS to address .................................................. 10 2.4 The need for NbS .......................................................................................... 10 2.5 Challenges to mainstreaming NbS .......................................................... 12 2.6 Opportunities for mainstreaming NbS .................................................. 14 2.7 Reviewing our sectoral cooperation opportunities ............................ 15 2.8 Alignment with IUCN criteria for NbS .................................................... 16 2.9 Implications for the MERLIN Academy .................................................. 18 2.10 Next Steps ...................................................................................................... 19 2.11 References ..................................................................................................... 19 3 Briefing for Agriculture Sector ................................................................ 21 3.1 Relationship of the Agriculture sector with freshwater restoration and NbS ............................................................................................. 21 3.2 Challenges and Opportunities of the Agriculture sector ................. 24 3.3 Cooperation (MERLIN & the Agriculture sector) ................................ 26 3.4 Next Steps ..................................................................................................... 27 3.5 References .................................................................................................... 27 4 Briefing for Hydropower Sector .............................................................. 30 4.1 Relationship of the Hydropower sector with freshwater restoration and NbS ............................................................................................ 30 4.2 Challenges and Opportunities of the Hydropower sector ............... 32 4.3 Cooperation (MERLIN & the Hydropower sector) ............................... 33 4.4 Next Steps ..................................................................................................... 34 4.5 References .................................................................................................... 34 5 Briefing for Insurance Sector .................................................................. 36 5.1 Relationship of the Insurance sector with freshwater restoration and NbS ............................................................................................ 36 5.2 Challenges and Opportunities of the Insurance sector ................... 38 5.3 Cooperation (MERLIN & the Insurance sector) ................................... 39 5.4 Next Steps ..................................................................................................... 39 5.5 References .................................................................................................... 40 6 Briefing for Navigation Sector ................................................................. 41
MERLIN Deliverable D4.1 I Page 4 6.1 Relationship of the Navigation sector with freshwater restoration and NbS ............................................................................................. 41 6.2 Challenges and Opportunities of the Navigation sector .................. 43 6.3 Cooperation (MERLIN & the Navigation sector) ................................. 44 6.4 Next steps...................................................................................................... 45 6.5 References .................................................................................................... 45 7 Briefing for Peat Extraction Sector ........................................................ 47 7.1 Relationship of the Peat Extraction sector with freshwater restoration and NbS ............................................................................................ 47 7.2 Challenges and Opportunities of the Peat Extraction sector ......... 49 7.3 Cooperation (MERLIN & the Peat Extraction sector) ........................ 50 7.4 Next Steps ...................................................................................................... 51 7.5 References ..................................................................................................... 51 8 Briefing for Water Supply and Sanitation Sector ................................ 53 8.1 Relationship of the WSS sector with freshwater restoration and NbS 53 8.2 Challenges and Opportunities of the WSS sector .............................. 55 8.3 Cooperation (MERLIN & the WSS sector) .............................................. 56 8.4 Next Steps ..................................................................................................... 57 8.5 References .................................................................................................... 57 9 Conclusion ................................................................................................... 59 10 Annexes ...................................................................................................... 60 Annex 1: Methodology ......................................................................................... 60 Annex 2: Number of roundtable participants and interviewees based on organisation types and scale of operation .............................................. 61 Annex 3: Replies to reviewers’ comments ..................................................... 63
MERLIN Deliverable D4.1 I Page 5 Acronyms CAP Common Agricultural Policy EIA Environmental Impact Assessment EIP-AGRI Agricultural European Innovation Partnership EU European Union EUWMA European Water Managers Association GAEC Good Agricultural and Environmental Conditions GEMAPI Gestion des milieux aquatiques et prévention des inondations (French Law) H2020 Horizon 2020 IUCN International Union for Conservation of Nature IPCC Intergovernmental Panel on Climate Change IPBES Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services MERLIN Mainstreaming Ecological Restoration of freshwater-related ecosystems in a Landscape context: INnovation, upscaling and transformation NbS Nature-based Solutions PSI Principles for Sustainable Investment RPP Responsibly Produced Peat RTD Round Table Discussion SEA Strategic Environmental Assessment TNFD Task force on Nature-related Financial Disclosure UNEP United Nations Environment Programme WFD Water Framework Directive WP Work Package WSS Water Supply and Sanitation
MERLIN Deliverable D4.1 I Page 6 List of Figures Cross Sectoral Briefing Figure 1: Illustration of large and small-scale Nature-based Solutions (NbS)..................................................09 Figure 2: How the MERLIN economic sectors interact……………………………………………………...........................13 Figure 3: How NbS compares to traditional grey solutions………….......................................................................15 Figure 4: IUCN Global Standards on NbS...................................................................................................................18 Briefing for Agriculture Sector Figure 1: NbS for reconnecting floodplains...............................................................................................................24 Figure 2: Farm-scale interventions.............................................................................................................................24 Figure 3: Farm-scale interventions.............................................................................................................................24 Briefing for Hydropower Sector Figure 1: Distribution of recorded Hydropower plants in Europe.........................................................................32 Briefing for Peat Extraction Sector Figure 1: Peatland distribution in Europe...................................................................................................................49 Briefing for Water Supply and Sanitation Sector Figure 1: NbS for lowering flood risk in different river sections...........................................................................55 List of Tables Cross Sectoral Briefing Table 1: Summary of Proposed Cooperation Opportunities....................................................................................16 Table 2: Evaluation against IUCN criteria....................................................................................................................18 Briefing for Hydropower Sector Table 1: Examples of NbS for Hydropower - Dam Removal..................................................................................33 Briefing for Peat Extraction Sector Table 1: Examples of NbS for the Peat Extraction Sector......................................................................................50
MERLIN Deliverable D4.1 I Page 7 1 Introduction Mainstreaming aquatic restoration using Nature-based Solutions: supporting transformation with six economic sectors This deliverable provides our baseline for working towards transformation with the six MERLIN economic sectors (Agriculture, Hydropower, Insurance, Navigation, Peat Extraction and Water Supply and Sanitation) over the rest of the MERLIN project. The deliverable summarises our understanding of the MERLIN sectors’ current connection with rivers and wetlands, and how Nature-based Solutions (NbS) are viewed within the sectors at the start of our collaboration. Building on these insights, it proposes how MERLIN can support the sectors to implement and mainstream freshwater restoration as NbS. The deliverable comprises seven briefings. The first ‘cross-sectoral briefing’ (Section 2) is based on an analysis of the commonalities and differences across our six economic ‘MERLIN’ sectors. The specific challenges, opportunities and proposed cooperation points for each sector are described in the remaining tailored briefings (sections 3 – 8) making up D4.1. These seven briefings are designed to be read on their own, without need to read D4.1 from top to bottom. Therefore, there is some repetition regarding the description of MERLIN project, definition of NbS and next steps in the sectoral briefings.
MERLIN Deliverable D4.1 I Page 14 Figure 3: How NbS compares to traditional grey solutions 8 Policy is often seen as providing the basis for long-term planning by providing clear objectives, obligations, and incentives for positive behaviour. However, our data suggest that sectoral respondents believe that existing policies do not support an NbS approach and there remain tensions between the implementation of the Common Agricultural Policy and Water Framework Directive (WFD) for example. Whilst there are positive signs of a shift in thinking towards working with nature, particularly with the Green Deal objectives and the proposed Nature Restoration Law, the economic sectors are seeking more evidence on how these policies balance environmental, economic, and social objectives. 2.6 Opportunities for mainstreaming NbS Challenges can become opportunities when addressed. For example, the concerns about balancing economic, social, and environmental considerations are central to a true NbS which addresses societal challenges, whilst being economically viable and socially just (see Table 2 below). This is related to the fact that sectoral questionnaire respondents identified ‘increasing economic outcome (profits)’ (n=24) as the main way to motivate the sector to support NbS. Therefore, the opportunity is to illustrate how investing in NbS is not a cost but an asset to the resilience of a business (particularly under conditions of climate change). Furthermore, round table participants were mindful of the reputation of a sector in terms of societies shifting expectations in relation to sustainability (e.g., within Hydropower and Peat Extraction). Additionally, the sector actors were seeking more information of the costs and benefits of NbS. Furthermore, as highlighted in Section 7 below, there is potential for the risk insurance sector to incentivise NbS uptake as part of Agriculture, Hydropower, Navigation, and Water Supply and Sanitation management of the risk of flood and drought damage to their assets. There is interest in how existing efforts to work with nature and contribute to NbS can be valorised by the market through certification and/or obtaining a product premium. Within Agriculture, there is a strong policy push towards organic or restorative Agriculture, but the sector is seeking evidence that these farming systems are recognised and rewarded by consumers. With the Peat Extraction sector, the Responsibly Produced Peat (RPP) certification process is being used to ensure that where peat is extracted for horticulture, the sites are restored to a suitable standard and there are opportunities to strengthen these standards. Within Navigation, there was discussion of whether the reduction in greenhouse gases from water borne transport could be signalled in marketing to incentivise the shift from road to river; and green tourism standards for river cruises could also be used to incentivise investments in river restoration. There is an opportunity to explore having certification for NbS with IUCN11 and to use public procurement processes to reinforce the uptake of NbS by economic sectors. Furthermore, there was a keen interest in more information about funding and financing (raised by 52 respondents) to increase the different routes to pay for NbS implementation. Grants and subsidies remain popular means of financing restoration measures, particularly with Agriculture and Peat Extraction sector
MERLIN Deliverable D4.1 I Page 15 respondents. However, there was considerable interest in payment for ecosystem services and carbon credits across all the economic sectors. One of the ongoing aspects of financing the transformation to working with nature is not only financing the capital costs of measures but financing the operational costs and ongoing maintenance to ensure delivery of ecosystem services and benefits over the investment time frame. Furthermore, ensuring there are sufficient ‘bankable’ projects means working at scale – this can be a challenge where there is fragmented land ownership requiring intermediaries to parcel up multiple holdings but conversely some of our sectors already have strong coordinated networks delivering large scale infrastructure e.g. Rhine and Danube conventions to maintain international navigation routes, or large-scale hydropower providers that could lend themselves to working at such scales. The need for more evidence was clearly signalled and other parts of the MERLIN project are working on this including providing evidence of how interventions create Green Deal outcomes (through monitoring processes) and the estimation of costs and benefits of ecosystem service provision created by restoration interventions. Section 9 (Implications for the Academy) highlights some ideas including how we can share insights from other research projects and existing data. There are also opportunities for data -driven industries, such as the risk insurance companies, to share how they estimate flood vulnerability and incorporate the impact of upstream NbS on downstream risks. However, we need more than provision of information but knowledge exchange and increased mutual understanding. Questionnaire respondents, and participants in our RTDs were keen to pursue building of networks to link researchers, industry experts and water managers, which is the motivation to build up the MERLIN Community of Practice. Respondents were seeking guidelines for NbS. However, many roundtable participants felt there were already industry guidelines, so the best approach might be to bring a strong NbS freshwater lens to those already in use by sectors. The issue of trade-offs, conflict and burden sharing is difficult to resolve. Policy has a role to play in ensuring a level playing field for businesses within Europe; and respondents suggested many issues where policy coherence or implementation could be improved. For example, swapping biomass grown on rewetted peat extraction sites for peat as sources of heat and power. However, it is also possible to overcome conflicts through building networks and mutual understanding, whereby opportunities for common ground can be found as evidenced by the benefits of integrated catchment or watershed institutions12. Again, this is the purpose of building a Community of Practice and it is heartening that despite robust debate and strongly held views, a core of highlevel sector experts has engaged with, and educated the MERLIN project team about their sector and potential ways to work together. 2.7 Reviewing our sectoral cooperation opportunities Interviews and questionnaire responses show that NbS is not just about technical solutions as there are administrative, governance and policy dimensions that can constrain or facilitate the application of NbS. Hence, the individual sector briefings identify the following ‘cooperation’ opportunities that we will focus upon over the next year (see Table 1). Table 1: Summary of Proposed Cooperation Opportunities Sector Cooperation Opportunities Agriculture Enhancing the enabling environment to get more uptake of NbS on farm land through identifying and sharing: ➔ Benefits of NbS ➔ Evidence of impact on farm resilience ➔ Capacity building and networking opportunities ➔ New policies or products (e.g. insurance, certification and CAP implementation) Hydropower Facilitation of dam removals where the dams are no longer economically viable through identifying and sharing:
MERLIN Deliverable D4.1 I Page 16 ➔ Evidence on cost-benefits ➔ Tools to screen potential dams for removal ➔ Existing examples ➔ Finance mechanisms ➔ Catchment partnerships for strategic planning Insurance Better defining NbS benefits to use in new products through ➔ Adapting risk models to include NbS benefits ➔ Addressing alternative risk transfer models ➔ Meetings and workshops ➔ Revised regulatory frameworks to support investment in NbS Navigation Integrated project delivery including Navigation through: ➔ Evidence of how NbS can sustain fairways ➔ Engage other sectors involved in water infrastructure and management ➔ Raise awareness of NbS including training events Peat Extraction Ensuring licences require revegetation if possible, and require appropriate afteruse through improving planning and licence processes and/or certification Linking restoration of peat extraction sites with wider peatland restoration approaches (as a business opportunity) through engagement in wider partnerships and sharing funding mechanisms Water Supply & Sanitation Raising awareness of the importance of working upstream using large-scale NbS through: ➔ Providing more opportunities to work in catchment partnerships ➔ Identifying policy levers to help with upstream coordination of multiple landowners ➔ Providing more information on finance mechanisms Table 1 shows that for many, it is not yet possible to work directly with the sectors on implementing NbS, as there is still a need to provide more information about the benefits of NbS and to enable more financing, collective action and resolve policy coherence problems. Therefore, the overall cross-sectoral implications of these cooperation opportunities are that often they are seeking evidence that may span multiple economic sectors; they need more information and concrete examples of NbS in action that again may relate to multiple economic sectors; and they seek further engagement with networks or partnerships to integrate their sectoral objectives into spatial catchment planning. The cooperation opportunities also respond to the questionnaire results that respondents were seeking more information about NbS to resolve conflict and balance trade-offs. 2.8 Alignment with IUCN criteria for NbS Our MERLIN project proposes to develop a ‘route-map’ of different ways to get from our starting cooperation points with the six economic sectors to the end point of cross-sectoral working to deliver NbS at scale and at pace across Europe. In this section, we summarise to what extent we are already mainstreaming ‘NbS’ within these sectors. The criteria in Table 2 are adapted from the IUCN Global Standard for Nature-based SolutionsTM.
MERLIN Deliverable D4.1 I Page 17 Figure 4: IUCN Global Standards on NbS13 Table 2: Evaluation against IUCN criteria IUCN criterion Evaluation from our sectoral engagement NbS address societal challenges as identified by beneficiaries; these agreed challenges are documented and the outcomes are assessed. The impact of negative environmental change on society is recognised but it has been harder to agree on the specific challenges to prioritise. The findings reported in this briefing draw intentionally on organised stakeholder voices active within the economic sectors and freshwater management at the European Union, supra-national regions or national scale and therefore do not include the views of local populations.14 Impacts are being assessed for the 17 MERLIN case studies. NBS is informed by geographic, economic and institutional scales; synergies across sectors are sought and impacts beyond the intervention site are considered. The process has deliberately targeted the scale(s) relevant to the sectors rather than the biophysical approaches; and we seek to find synergies between the MERLIN sectors as well as within catchments. However, it has proved challenging to handle the multi-level aspects of how many sectors are organised (businesses; networks; member states and pan-EU or global). Furthermore, we are mindful that many other sectors are involved in NbS and the MERLIN case studies. NbS result in a net gain to biodiversity and ecosystem integrity; these outcomes are measured including ensuring there are no unanticipated adverse effects. The responsibility of sectors to deliver biodiversity net gain is disputed and there is uncertainty about how NbS generates ecological benefits, including some sector respondents suggesting that some MERLIN interventions might degrade some habitats (e.g. the claim that removing dams can destroy upland wader habitats). Other respondents felt economic priorities still overrode environmental concerns. Therefore more knowledge sharing is needed about restoring functioning ecosystems and the benefits restoration in MERLIN can bring to the sectors.
MERLIN Deliverable D4.1 I Page 18 NbS should be economically viable, including estimating costs and benefits over time. This principle is well accepted but currently difficult to implement, with the sectors seeking more information about costs and benefits, return on investments and the ability to balance economic and environmental benefits. Many sectoral respondents were also seeking more certainty about how NbS could be evaluated against more conventional interventions. The interest in a range of financing options is encouraging. NbS use inclusive and transparent governance processes that allow for conflict resolution and document the discussions. The participants in the interviews and roundtables were identified through stakeholder analyses to represent a particular set of stakeholders often missing in discussions about NbS. (Potential) conflicts have been identified and interactions documented but we have yet to resolve fundamental differences of opinion. NbS manage trade-offs in an equitable manner; respecting different rights and responsibilities and providing safeguards to avoid inequality. The process has started to identify rights and responsibilities within the sectors and identified some trade-offs to be resolved. However, it is not easy to find mechanisms to resolve these trade-offs and attention to inequality is part of further work planned. NbS are managed adaptively based on evidence but allowing for innovation and experimentation The process so far has clearly highlighted the need for more evidence before the sectors will engage with large scale NbS. However, there seems limited appetite to experiment with NbS and adapt as evidence is obtained, as most sectoral respondents were seeking certainty before adopting NbS as common practice. NbS are mainstreamed within appropriate national and international frameworks Our approach in developing the community of practice is precisely to share lessons with economic sectors in ways that align with relevant policies and programmes. The process has clearly identified some policy issues to resolve. Part of our next steps is to consider how to best align with IPCC/IPBES/IUCN frameworks. 2.9 Implications for the MERLIN Academy The data suggests that there is a need to explain the benefits of restoration and how it could become a NbS (see Table 2 above); which also reflects findings from the roundtables and interviews reported in the sectoral briefings. This has already been partially addressed by the inaugural MERLIN webinar15, but further dissemination of this information would be useful; and targeted information per sector will be the most compelling. Explaining what restoration and NbS are, and how these concepts interact, could also be helpful. Our research suggests that NbS is not (yet) a common term for many sectors, although they understand the principle of sustainability and working with nature. The discussions around the proposed Nature Restoration Law16 might provide a useful way to introduce these terms and explain why they are relevant to the sectoral practices. There remains a conceptual shift to be made for some sectors to move from benefiting from restoration measures or NbS implemented by other sectors to investing in these measures directly. However, understanding how to do this requires more analysis of the policy and market conditions that impede the insurance sector, navigation and Water Supply and Sanitation sector investing directly in large-scale upstream NbS. The issues around financing will be tackled through a workflow to build capacity in how to tap into private finance for NbS including planned briefings on ‘off-the-shelf’ financial instruments as part of WP3. As our findings become available, the Academy can provide further information about potential ways to transform these blockages into opportunities. It is always helpful for those running businesses that depend on, and/or affect, freshwater resources, to learn from demonstration projects and hence it would be useful to host visits of sectoral representatives to the
MERLIN Deliverable D4.1 I Page 19 MERLIN, twin partner, or other relevant demonstration sites. Again, addressing the specific needs of the sector (e.g. shipping firms to understand how opening sidearms can work or farmers understanding floodplain reconnection) is more powerful than a general field visit for all sectors. This is because, for some actors, awareness of their role in restoration as NbS is needed before we can move into cross-sectoral working. When individuals are aware of, and comfortable discussing the concepts of restoration and NbS, it is then appropriate to move towards more cross-sectoral working to generate networks of aligned economic champions working together in specific basins or catchments (as anticipated by MERLIN’s regional and EU wide upscaling plans). These cross-sectoral discussions are planned to begin during 2023-4. 2.10 Next Steps Our findings, particularly regarding the challenges in bringing the ‘MERLIN’ sectors with us on a journey of transformation, resonate with other findings17. However, the continued engagement by members of our sectors with our work provides hope for the future. Further roundtables are planned in 2023, to deepen discussions within each of the six economic sectors; bring the sectors together to discuss interactions and to also involve other important supporting sectors such as tourism, forestry, or gravel extraction. The next RTDs will focus on the cooperation opportunities to advance these ideas in ways that understand their needs, challenges, and opportunities. We will examine the relevant EU policies, particularly in light of the policy issues highlighted in Section 5, to identify how existing and potential policies (e.g. the proposed Nature Restoration Law) could be used to mainstream NbS across Europe. In particular, how policy can provide a foundation to motivate and support economic sectors to become more involved in NbS implementation. Alongside policy analysis, we will start to consider how the market could reward protection or enhanced natural capital and ecosystem services as part of the sectors’ value chains, potentially through enhanced accreditation processes. Finally, we will Incorporate issues of social justice alongside ecological and economic considerations in the process to mainstream NbS within the sector so that the transformation tries to ‘leave no-one behind’. There is no better way to end this briefing than with the words of a questionnaire respondent: “In the current uncertainty of climate conditions and patterns, water becomes more than ever a valued resource. Many economic activities depend on it. Therefore, to ensure sustainable businesses, a healthy environment and human development, we need to ensure that water is maintained, used, and preserved in an optimal balance.” 2.11 References 1 Cohen-Shacham, E., Walters, G., Janzen, C., Maginnis, S. (2016). Nature-based solutions to address global societal challenges. IUCN: Gland, Switzerland, 97, 2016-2036. 2 Ruangpan, L., Vojinovic, Z., Di Sabatino, S., Leo, L.S., Capobianco, V., OEN, A.M.P., McClain, M.E. & Lopez-Gunn, E. (2020). Nature-based solutions for hydro-meteorological risk reduction: a state-of-the-art review of the research area. Natural Hazards and Earth System Sciences, 20, 243-270. 3 European Economic Area (2018). European waters — Assessment of status and pressures 2018 , EEA Report, 7/2018, European Environment Agency. https://www.eea.europa.eu/publications/water-resources-acrosseurope-confronting. 4 European Economic Area (2021). Water use and environmental pressures: Tracking barriers and their impacts on European river ecosystems. https://www.eea.europa.eu/themes/water/european-waters/water-use-andenvironmental-pressures/tracking-barriers-and-their-impacts. 5 A report on the results will be available during December 2022 here: https://www.hutton.ac.uk/research/projects/merlin-mainstreaming-ecological-restoration-freshwaterrelated-ecosystems. 6 Harrison, I., Abell, R., Darwall, W., Thieme, M. L., Tickner, D. & Timboe, I. (2018). The freshwater biodiversity crisis. SCIENCE, 362, 1369-1369.
MERLIN Deliverable D4.1 I Page 20 7 Stafford, R., Chamberlain, B., CLAVEY, L., Gillingham, P.K., McKain, S., Morecroft, M.D., Morrison-Bell, C., Watts, O. (ed.) (2021). Nature-based Solutions for Climate Change in the UK: A Report by the British Ecological Society. London, UK, London, UK: British Ecological Society. 8 Martin, J. G., Scolobig, A., Linnerooth-Bayer, J., Liu, W. & Balsiger, J. (2021). Catalyzing innovation: governance enablers of nature-based solutions. Sustainability, 13, 1971. 9 Van Der Meer, P. J., Tata, H., Rachmanadi, D., Arifin, Y. F., Suwarno, A. & Van Arensbergen, P. (2021). Developing sustainable and profitable solutions for peatland restoration. IOP conference series. Earth and environmental science, 914, 12032. 10 Di Baldassarre, G., Sivapalan, M., Rusca, M., Cudennec, C., Garcia, M., Kreibich, H., Konar, M., Mondino, E., Mard, J., Pande, S., Sanderson, M. R., Tian, F. Q., Viglione, A., Wei, J., Wei, Y. P., Yu, D. J., Srinivasan, V. & Bloschl, G. (2019). Sociohydrology: Scientific Challenges in Addressing the Sustainable Development Goals. Water Resources Research, 55, 6327-6355. 11 International Union for Conservation of Nature (7 September 2021). IUCN to develop collaborative certification scheme for Nature-based Solutions. https://www.iucn.org/news/species/202109/iucn-develop-collaborativecertification-scheme-nature-based-solutions 12 Baldwin, C. & Ross, H. (2012). Bridging Troubled Waters: Applying Consensus-Building Techniques to Water Planning. Society & Natural Resources, 25, 217-234. 13 International Union for Conservation of Nature (2020). IUCN Global Standard for Nature-based Solutions: first edition. https://www.iucn.org/resources/publication/iucn-global-standard-nature-based-solutions-firstedition 14 These perspectives are being sought through engagement in the case study boards for the 17 MERLIN demonstration and implementation projects. Impact on human-wellbeing is being measured by Green Deal indicators to be reported throughout the project (see here for more details https://project-merlin.eu/csportal.html] 15 MERLIN Project (30 March 2022). MERLIN Project webinar (01): Why freshwater ecosystem restoration makes (economic) sense. https://www.youtube.com/watch?v=W1gdAhXUA1Y 16 Proposal for a Regulation 2022/0195 of the European Parliament and of the Council on nature restoration of 22 June 2020. Retrieved from: https://environment.ec.europa.eu/publications/nature-restoration-law_en 17 Cortina-Segarra, J., García-Sánchez, I., Grace, M., Andrés, P., Baker, S., Bullock, C., Decleer, K., Dicks, L. V., Fisher, J. L., Frouz, J., Klimkowska, A., Kyriazopoulos, A. P., Moreno-Mateos, D., RodríguezGonzález, P. M., Sarkki, S. & Ventocilla, J. L. (2021). Barriers to ecological restoration in Europe: expert perspectives. Restoration Ecology, 29, e13346.
MERLIN Deliverable D4.1 I Page 21 3 Briefing for Agriculture Sector Mainstreaming aquatic restoration using Nature-based Solutions: Supporting Sectoral Transformation Climate change and biodiversity crises are posing new challenges for sectors across Europe, demanding new solutions. A collaborative approach with key economic sectors is essential to enable the H2020 MERLIN project to promote systemic transformative change that can help people, nature and the economy. We will co-develop transformation strategies with different sectors to mainstream restoration as a Nature-based Solution (NbS) for their challenges. Working with nature at landscape scale can contribute to the EU Green Deal objectives (climate resilience, improved biodiversity, zero pollution, health, and wellbeing and sustainable food systems). NbS has been defined by the International Union for Conservation of Nature (IUCN) as “actions to protect, sustainably manage, and restore natural or modified ecosystems, that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits” 1 . This briefing focuses on the Agriculture sector. It summarises our understanding of the sector's current connection with rivers and wetlands, and how Nature-based Solutions (NbS) are viewed within the sector at the start of our collaboration. The briefing proposes how MERLIN can support the Agriculture sector to implement NbS across catchments (more information about the MERLIN project can be found here). How can MERLIN support transformation? The Agriculture sector can play a crucial role in contributing to reach Europe’s Green Deal objectives, besides contributing to sustainable food systems. In particular, responding to extreme events such as recent floods, droughts, and heat waves. Transformation whereby NbS becomes the new normal will only happen through multiple actions involving government, markets and citizens. MERLIN will support this through understanding how and why the Agriculture sector is already making positive changes, sharing good practice between European countries and exploring how NbS could help overcome some of the challenges faced by the sector. The briefing is based on a range of insights from involving individuals actively engaged in the Agriculture sector (using questionnaires, interviews, and participating in sector meetings) and a desktop review of formal documents. We are very grateful for the insights shared to date, which have helped us understand the different positions. The synthesis provided in this briefing reflects the views of the authors and does not imply consensus within our developing Community of Practice. Our Community of Practice concerns EU and Member State level policy and commercial actors of the Agriculture sector who share a common interest in improving their practices through regular interaction and sharing information. 3.1 Relationship of the Agriculture sector with freshwater restoration and NbS 3.1.1 Brief description of the sector The Agriculture sector is a highly heterogeneous sector across the EU. It consists of establishments primarily engaged in growing crops, raising animals, and harvesting food or fibre from a farm, ranch, or their natural habitats. The Agriculture sector and its major activities are dependent on the geographical context, including the climate and the various forms of land uses and farm structures. The Agriculture sector comprises sub sectors that include arable farming, livestock, agroforestry-forestry, fishing and aquaculture - in MERLIN we are focussed on crop and livestock farming. Food production, and thus EU food security, is important for the sector. Almost 40% of EU land, 173 million hectares, were used for agricultural production in 2016, Of the EU's 10.5 million farms, the majority are small (under 5 hectares) with relatively low standard outputs and covering only about 25% of the total agricultural area. In contrast, 304,000 large farms (3% of the EU total) each produced a standard output of EUR 250,000 per year or more in 2016 and were responsible for a majority (55.6%) of the EU's total agricultural economic output. This diversity has to be considered when encouraging uptake of NbS at scale. The number of farms in the EU has been in steep decline, but the amount of land used for production has remained steady. Agriculture remains a big employer within the EU; 9.7 million people worked in Agriculture in 2016. However, as the number of farms in the EU has declined, so has the number of farmers and those employed in Agriculture, falling from 5.7 % of total EU employment in 2005 to 4.4 % in 2016 3. The sector has to
MERLIN Deliverable D4.1 I Page 22 face market competition that further threatens small-scale farmers4, as global market competition tends to favour large scale production and cheap labour5. Concerns over rural depopulation and the need to safeguard food security explains why successive Common Agricultural Policy reforms still contain elements of income support to maintain rural populations as well as competitive food export conditions. The sector faces various economic, social and environmental challenges that undermine food systems and increase the pressures on natural resources: Copa-Cogeca6 warns of the “difficult debates” coming up on “generation renewal, low farm income, market volatility and climate change”. Climate change is intrinsically linked to water, a resource the sector is highly dependent on: soil, ground and surface water for rain fed or mechanical irrigation. It is the second main source of water extraction in the EU7. accounting for 24% of water use on average in Europe, with some catchments in Southern Europe reaching 90%8. To provide agricultural land with sufficient water, using dams, or to reclaim land using drainage, farmers have altered the hydromorphology of wetlands, streams, peatlands, rivers and floodplains, which can reduce resilience to extreme weather events on farm and downstream. Agricultural production also affects water quality. Despite the increasing shift of the sector towards more sustainable practices, Agriculture is still the largest contributor of nutrient pollution to groundwater6. It generates diffuse pollution from nutrients and pesticides as well as sediments9. The effects of Agriculture on water quality obviously depend on the geographical context, farming system and management practices, e.g., extensive VS intensive management, organic VS conventional cultivation10. Coupled with climate change, Agriculture’s pressure on natural resources leads to the degradation of the (agro)-ecosystems, affecting agricultural production and productivity and the sector’s adaptation capacity. Changes in climatic conditions and extreme events related to climate change have affected crop yields and livestock productivity in Europe, with regional variations. For instance, droughts and heat waves have increasingly affected costs and caused economic losses in Agriculture11 . Future climate projections reveal potential increase in yield loss, in some European regions 12. Crop productivity has also been affected by changes in plant phenology and the time of flowering induced by climate change, as it has disturbed interactions between plants and pollinators13. Agriculture, at the same time, also contributes to climate change, e.g., through the release of greenhouse gases14. The greening of the Common Agricultural Policy and several European strategies, e.g. the Green Deal, Farm to Fork and Biodiversity strategies, are increasingly supporting the transition towards sustainable food systems by aiming at improving the environmental and climate performance of European Agriculture. The Farm to Fork Strategy aims at having 25% organic land by 2030, from around 9% of total utilised agricultural area in 202015 - this is one strategy to combat the negative impacts of some farming practices on water bodies and their biodiversity. Measures also exist at the Member States level, e.g. farm-level nutrient planning, setting aside buffer strips or fertiliser standards, leading to a general improvement of water quality in the European rivers. Whilst the sector seeks to improve its environmental standards, they are also seeking more funding to do it. 3.1.2 NbS and their potential for supporting the sector In MERLIN, we understand NbS as working at the landscape or basin scale, to connect farmed land to the natural wetlands, floodplains and natural channels that provide many ecosystem services (from downstream provision of drinking water, regulation of flood peak speeds, supporting biodiverse food webs and cultural or health benefits from recreation). This understanding shows that NbS can be used to achieve different goals within the Agriculture landscape.16 (1) Sustainable production practices such as agroforestry and windshields can be used to increase food production, while reducing the conventional Agriculture practices. (2) Measures such as wetlands, riparian buffers and grass strips could regulate water, control soil erosion and stabilise slopes. (3) NbS could enable the removal of pollutants and rehabilitation of degraded lands. This process helps agricultural lands to function as carbon sinks, pollinators or pollution control. (4) Finally, as a conservation function, NbS can enable the sector to improve biodiversity and ecological connectivity across landscapes. Overall, it offers the opportunity for the Agriculture sector to use nature to rehabilitate landscapes affected by agricultural activities.
MERLIN Deliverable D4.1 I Page 23 Figure 1: NbS for reconnecting floodplains17 As shown in Figure 4, a coordinated approach across multiple farms is needed to generate landscape, or basin scale, outcomes to reduce diffuse pollution, mitigate floods and help protect against droughts. These linked aquatic habitats also provide blue carbon benefits for climate sequestration and biodiversity, helping to meet Green Deal Goals. Innovations like paludiculture may allow farming and floodplains or peatland to co-exist. Paludiculture helps to productively sustainably use drained agricultural lands. However, much of the discussion of NbS to date has focussed on farm measures aiming to improve soil water and fertility, as shown in Figures 2 and 3. These are important, but NbS need to consider the complex ecosystems that extend beyond the farm boundaries illustrated in Figure 1. Figures 2 and 3: Farm-scale interventions18 3.1.3 How the sector currently understands NbS Both in interviews and in sectoral agricultural meetings, most of the participants said to be aware of the meaning of NbS, however, a diverse set of understandings was put on the table (e.g. NbS as a new terminology that reflects traditional practices, such as agroforestry, intercropping, crop rotation, cover cropping, and traditional organic composting, that have less impact on the environment than modern intensive practices; or NbS as a very abstract concept.) Most of the participants connected NbS to, e.g., the concept of sustainability, or to circularity, resilience, sustainable intensification, by linking the terminology to improved human-nature
MERLIN Deliverable D4.1 I Page 30 4 Briefing for Hydropower Sector Mainstreaming aquatic restoration using Nature-based Solutions: Supporting Transformation A collaborative approach with key economic sectors is essential to enable the H2020 MERLIN project to promote systemic transformative change. We will co-develop transformation strategies with different sectors to mainstream restoration as a Nature-based Solution (NbS). Working with nature at landscape scale can contribute to the EU Green Deal objectives (climate resilience, improved biodiversity, zero pollution, sustainable food systems, health, and wellbeing). NbS has been defined by the International Union for Conservation of Nature (IUCN) as “actions to protect, sustainably manage, and restore natural or modified ecosystems, that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits” 1 . This briefing focuses on the Hydropower sector. It summarises MERLIN’s understanding of the sector's current connection with rivers and wetlands, and how NbS are viewed within the sector at the start of the collaboration. The briefing proposes how MERLIN (more information about the MERLIN project can be found here) can support the Hydropower sector to implement NbS. How can MERLIN support transformation? The Hydropower sector can play a crucial role in responding to Europe’s Green Deal objectives, as the Biodiversity Strategy 2030 aims to restore at least 25,000 km of rivers to free-flowing by 2030. Transformation whereby NbS becomes the new normal will only happen through multiple actions involving government, markets, and citizens. MERLIN will support this through understanding how and why the Hydropower sector is already making positive changes, sharing good practices between European countries, and exploring how NbS could help overcome some of the challenges faced by the sector. The briefing is based on a range of insights from involving individuals actively engaged in the Hydropower sector (using Round Table Discussions (RTDs), questionnaires, interviews) and a desktop review of formal documents. The MERLIN team is very grateful for the insights shared to date, which have helped to understand the different positions. The synthesis provided in this briefing reflects the views of the authors and does not imply consensus within the developing Community of Practice of MERLIN. The Community of Practice concerns EU and Member State level policy and commercial actors of the Hydropower sector who share a common interest in improving their practices better through regular interaction and sharing information. 4.1 Relationship of the Hydropower sector with freshwater restoration and NbS 4.1.1 Brief description of the sector Hydropower is one of the largest and oldest sources of renewable energy, involving the generation of electricity from the flow of water through turbines. Types of hydroelectric generation plants are reservoir power plants, run-of-river hydropower, pumped storage hydropower and hidden hydropower in conveyance networks (drinking water, wastewater, agricultural channels). Currently, Hydropower contributes 13.8% to overall net electricity generation.2 There are 21,387 hydropower plants in the EU, while 8785 additional plants have been proposed or are under construction (Figure 1). The efficiency of hydropower dams is an important factor for the sector (i.e. that may decrease as dams age) that has helped lead to their removal of large dams, as they become less reliable and costly to upgrade by age5. It must be noted that there are many other in-river dams across catchments that are not directly linked to hydropower generation, but to Agriculture, Water Supply and Sanitation, or Navigation. Hydropower-related dams represent less than 2% of the approximately 1.2 million obstacles built in waterways10. However, the sector has an important role to play in river restoration. Firstly, because the sector as a whole is at a turning point now, due to a large number of ageing dams11. In Europe, an average hydropower plant is 45 years old, which requires a structural transformation. This is a unique opportunity to conduct this transformation in line with the Green Deal objectives. Secondly, the removal of these ageing and no longer economically viable dams would have relatively less negative socio-economic consequences compared to other dams that provide water supply or irrigation for example. Moreover, removing dams that are no longer economically viable is beneficial for the sector, not only cost-wise, but because hydropower plants have a more and more negative reputation in several parts of Europe.
MERLIN Deliverable D4.1 I Page 31 Figure 1. Distribution of recorded hydropower plants in Europe3 4.1.2 NbS and their potential for supporting the sector Ecological requirements (e.g. flow requirements attached to licences), technological improvements and sustainability standards mean the sector is moving towards reducing negative social and ecological impacts12. However, these practices are far from being mainstreamed and many social, environmental, and economic challenges remain for the sector. Therefore, NbS could help address a range of their challenges, while the sector itself can be instrumental in enabling the implementation of catchment scale NbS. NbS in the sector include the implementation of turbines, which enhances hydropower efficiency, but not restricting the free flow of water. Upstream river restoration and maintaining the river’s environmental flow - which preserves freshwater ecosystems while satisfying human consumption - are also mentioned as NbS practices. The most efficient practice is dam removal, when in line with NbS, as dams have a significant ecological and environmental impact, while it could strategically address socio-economic challenges as well. For example, it could contribute to the better management of potential impacts from extreme weather events, whilst also increasing the resilience of local communities and restoring local biodiversity13. Mainstreaming NbS within the sector could also help strengthen sustainability practice within the sector. It would also open up space to discuss social values of freshwater ecosystems to incorporate local stakeholders who may feel marginalised by traditional restoration processes6. Dam removal can restore natural flows and has catalysed further action within a catchment towards freshwater ecosystem restoration14 which can also help address socio-economic challenges (i.e. providing NbS). Achieving this to also provide benefits for the sector will be transformative and will involve greater cross sector collaboration. 4.1.3 How the sector currently understands NbS Nature-based solutions is not a widely understood concept within the sector. The current relationship to restoration in the Hydropower sector involves three broad views: ➔ Ecosystem restoration through dam removal is seen as a threat to meeting climate mitigation objectives through Hydropower, thus dam removal at scale needs to be resisted15. The sector stresses that there are other dams and obstacles in rivers that are not Hydropower and could be removed instead of hydropower dams. ➔ Negative ecological consequences of Hydropower are an issue and need to be reduced or mitigated16. These impacts are often narrowly viewed in terms of fish migration, and fish passages seem to be the preferred
MERLIN Deliverable D4.1 I Page 32 option before dam removal for the sector17, 18, forgetting water, sediments, and nutrients flow, as well as restoring ecosystem functionality. Policy frameworks exist which the sector needs to comply with. ➔ Ecosystems have been degraded by sector activities and more widely, and the sector needs to make a positive contribution to biodiversity and ecosystem services 19, 20. The second view seems to be the most prevalent to understand the sector's current relationship with restoration. However, in relation to dam removal social dimensions (if considered) are often narrowly defined in terms of local livelihoods (tourism sector, subsistence). Human wellbeing considerations of ecosystem restorations are often overlooked. This is despite the sector recognising its reliance on and role in shaping a range of ecosystem services (e.g. reliance on water and changes to water quality and fisheries). Dam removal has to be inspected through the NbS lens with the consideration of specific societal challenges. IUCN currently refers to seven societal challenges -climate change adaptation and mitigation, disaster risk reduction, reversing ecosystem degradation and biodiversity loss, human health, socio-economic development, food security and water security) and follow the NbS process accordingly, using the Global standard on NbS.7 4.1.4 Good examples of NbS for the Hydropower sector As mentioned above in section 4.1.2, several NbS practices are already applied in the sector, yet the most efficient one is considered to be dam removal, when in line with NbS. Therefore, in this briefing, we selected four examples of hydropower barrier removals from different parts of Europe (listed in Table 1), where this solution proves to be an NbS. Table 1: Examples of NbS for Hydropower - Dam Removal Initiative (name, locations, date) Key driver highlighted Lead stakeholders/funders Retrieved from (link) UNIPER plant on the Mörrum River, Sweden, 2020 ➔ Fish migration ➔ River connectivity UNIPER funded the plant’s removal with financial support from several other stakeholders, including the Baltic Salmon Fund and Life Connects. http://www.fiskma rknad.org/images/P resentationer/FM2 016-Dag-2-1450Johan_TielmanDam_removal.pdf Molló Dam Removal in Catalonia, Spain, 2020 ➔ Located in a Natura 2000 site and considered a trout genetic reserve Coordinated by the Department of Territory and Sustainability, and the Catalan Water Agency. https://damremova l.eu/mollo-damremoval-incatalonia-spain/ La Roche-qui-boit and Vezins on the Sélune, Normand, France, 2019 & 2021 ➔ Fish migration ➔ Water quality problems ➔ Low energy productivity of dams ➔ Regulatory obligations (e.g. make safe for local community) Environmental Defense Fund, supported by Patagonia (similar to other schemes) https://www.ern.or g/en/selune-libre/ Fåvang, Innlandet, east Norway - Old dam (not used in 50 years) ➔ Fish migration ➔ Safety (the dam was blown up as there was a rack in the middle) Norwegian angling club Gudbrandsdal Sportsfiskeforening Public funding https://damremova l.eu/explosivedam-removal/ 4.2 Challenges and Opportunities of the Hydropower sector 4.2.1 Challenges ➔ Water availability: Climate change on the one hand increases water scarcity risk and decreases water availability. On the other hand, it induces more severe natural hazards, such as floods and landslides, which contests the resilience of dams.4
MERLIN Deliverable D4.1 I Page 33 ➔ Negative reputation of Hydropower: The sector is increasingly recognised as holding some responsibility for the decline in freshwater biodiversity 12. ➔ Economic viability: Hydropower increasingly may not be the cheapest renewable energy option because of decreasing costs of alternative technologies, such as solar and wind. This could hinder new development, and for refurbishment, it is a factor that needs to be considered 21. ➔ Operational costs: Ageing of hydropower plants can incur higher maintenance costs (e.g. to maintain structural integrity or capacity, and to meet shifting legal and/ or societal expectations) 21. 4.2.2 Opportunities ➔ Enhancing localised climate resilience: hydropower dams can hinder local community’s climate resilience with a changing climate requiring both mitigation and adaptive action5, 13. The focus on climate adaptation and aspects of social justice could provide entry points into a discussion about how NbS could complement and strengthen the sector. ➔ Targeting less viable dams: Some hydropower schemes can be adapted and modernised to increase capacity and cost effectiveness, while there is also recognition that some hydropower structures will be retired. There are also many dams not in use that could be removed. This represents ‘low-hanging fruit’, and could be considered as part of a transformation strategy, if approached in terms of NbS (i.e. as part of a catchment scale strategic plan). ➔ Linking to the EU taxonomy: As for financial opportunities, the EU taxonomy could be used to support investment in dam removal as part of a NBS approach with its principal goal is to help the EU scale up sustainable investment and implement the European Green Deal. The Taxonomy regulation’s main objectives include climate change mitigation, adaptation, sustainable use and protection of water and marine resources, and protection and restoration of biodiversity and ecosystems8. However, currently there are concerns regarding how the delegated acts are defined, and the Taxonomy needs to include NbS more specifically. ➔ Drawing on diverse finance mechanisms: Green finance mechanisms could incentivize NbS application in the sector. The Climate Bonds Standard is also helpful in providing guidance for developers, banks, governments and others for direct investment on ensuring climate change resilience, improving environmental and social sustainability9. ➔ Working at scale with other sectors: Dams may be linked to other uses (now or in the past) such as Agricultural Irrigation, Navigation and Water Supply and Sanitation, and achieving the EU Green Deal needs to involve all such sectors. Across a catchment, opportunities for multisector NbS could be identified, potentially opening up additional finance options. 4.3 Cooperation (MERLIN & the Hydropower sector) MERLIN needs to base suggestions on transformation and mainstreaming on practical experience. There are many different aspects of how the Hydropower sector may connect to NbS. In order to be the most effective and reach low-hanging fruits, MERLIN would like to facilitate dam removal where dams are no longer economically viable and are more beneficial to society when removed. In the MERLIN project we will focus our work with the sector on the issues in bold: ➔ Help to prepare cost-benefit analysis about hydropower plants which includes externalities as well, such as biodiversity degradation and socio-economic impacts. ➔ Offer tools to the sector based on cost-benefit analysis on where to remove or refurbish economically no longer viable dams. ➔ Draw on existing examples of dam removal (such as the La Roche qui Boit example above) to develop understanding of NbS and dam removal across the sector. ➔ Work to support the development of cross sector partnerships involving hydropower organisations for more holistic approaches and large catchment scale NbS for restoration through dam removal. ➔ Develop an understanding about key entry points into decision making processes about future economic viability of dams to ensure consideration of NbS as an option. ➔ Develop an understanding and awareness of different finance mechanisms for supporting dam removal and NbS as a financially feasible path for the sector. For cross sectoral cooperation the relationship between the Hydropower sector and freshwater NbS has to be understood. In general all the MERLIN sectors (Hydropower, Navigation, Peat Extraction, Agriculture, Insurance)
MERLIN Deliverable D4.1 I Page 34 rely on the others to manage water resources better to avoid floods and droughts that mean that their sectors can continue to operate profitably. If not well managed Hydropower barriers and regulation of water can be in conflict with Water Supply and Sanitation, and Navigation; although in the past barriers were used to regulate water to help Navigation, Water Supply and Sanitation, and protect against flooding (therefore helping Insurance). Impoundments can be also used for agricultural irrigation but sediments from upstream land use including farming can silt up dams. Therefore, the implications across sectors will be considered. 4.4 Next Steps Overall, MERLIN is building a Community of Practice to support an understanding of NbS and how MERLIN can enable mainstreaming of NbS in the Hydropower sector; as well as how Hydropower can work with other sectors. Together with participants from the six sectors, in the next year MERLIN will: ➔ Continue to engage with the sector to exchange ideas and develop understanding of their needs, challenges, and opportunities for NbS ➔ Examine the EU policy context and how in the future policy could better enable NbS. ➔ Incorporate issues of social justice alongside ecological and economic considerations in the process to mainstream NbS within the sector. In the longer term, MERLIN will: ➔ Identify opportunities for cross sector partnerships by applying a value chain approach. ➔ Co-develop route maps for transforming the sector's relationship with NbS. For more information on how MERLIN will collaborate with the sectors’ representatives or to discuss how you can help MERLIN please contact Anna[email protected] or [email protected]. 4.5 References 1 Cohen-Shacham, E., Walters, G., Janzen, C., Maginnis, S. (2016). Nature-based solutions to address global societal challenges. IUCN: Gland, Switzerland, 97, 2016-2036. 2 EUROSTAT (2022) Electricity production, consumption and market overview, [Online]. European Commission. Retrieved from: https://ec.europa.eu/eurostat/statisticsexplained/index.php?title=Electricity_production,_consumption_and_market_overview [Accessed 28/09/2022 2022]. 3 Schwarz, U. (2019). Hydropower pressure on European rivers. A story in numbers. FLUVIUS, WWF, RiverWatch, EUroNatur, GEOTA. Retrieved from: https://www.wwf.eu/?356638/Hydropower-pressure-on-European-riversThe-story-in-numbers 4 Opperman, J.J., Camargo, R.R., Laporte-Bisquit, A., Zarfl, C., Morgan, A.J. (2022). Using the WWF Water Risk Filter to Screen Existing and Projected Hydropower Projects for Climate and Biodiversity Risks. Water, 14(721). DOI: doi.org/10.3390/w14050721 5 International Hydropower Association (2020). Hydropower Sustainability Guidelines. 2nd edition. 6 Chaffin, B. C., Gosnell, H. (2017). Beyond mandatory fishways: federal hydropower relicensing as a window of opportunity for dam removal and adaptive governance of riverine landscapes in the United States. Water Alternatives, 10(3), 819. 7 IUCN (2020). Global Standard for Nature-based Solutions. A user-friendly framework for the verification, design and scaling up of NbS. First edition. Gland, Switzerland: IUCN. 8 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment and amending Regulation (EU) 2019/2088. ELI: http://data.europa.eu/eli/reg/2020/852/oj 9 International Hydropower Association. (2021). Hydropower Status Report Sector trends and insights.
MERLIN Deliverable D4.1 I Page 35 10 Belletti, B., Garcia de Leaniz, C., Jones, J. et al (2020). More than one million barriers fragment Europe’s rivers. Nature 588, 436–441. https://doi.org/10.1038/s41586-020-3005-2 11 Mouchlianitis F.A. 2023. Dam Removal Progress 2022. World Fish Migration Foundation. 12 International Hydropower Association 2021. Advancing Sustainable Hydropower: Annual Report 2020-2021. London, UK. 13 International Hydropower Association 2019. Hydropower Sector Climate Resilience Guide. London, UK: International Hydropower Association Limited. 14 European Commission 2021. Biodiversity Strategy 2030 Barrier Removal for River Restoration. In: ENVIRONMENT, D.-G. F. T. (ed.). Luxembourg: Publications office of the European Union. 15 Song, C., O'Malley, A., Zydlewski, J. & Mo, W. 2020. Balancing fish-energy-cost tradeoffs through strategic basin-wide dam management. Resources, Conservation and Recycling, 161, 104990. 16 Uniper 2021. Sustainability Report 2020: Empower Energy Evolution. Germany: UNIPER SE. 17 Leisher, C., Hess, S., Dempsey, K., Payne Wynne, M. L. & Royte, J. 2022. Measuring the social changes from river restoration and dam removal. Restoration Ecology, 30, e13500. 18 Massachusetts Department of Fish and Game Division of Ecological Restoration 2015. Economic Benefits from Aquatic Ecological Restoration Projects in Massachusetts: Summary of Three Phases of Investigation. Massachusetts, US: Massachusetts Department of Fish and Game Division of Ecological Restoration. 19 Fortum 2020. Fortum Biodiversity Manual SUST-23 M2. 20 International Hydropower Association. Blog 19/8/15. Available at: https://www.hydropower.org/blog/let-e2-8099s-change-the-way-we-think-about-downstream-flows 21 Irena 2023. The changing role of hydropower: challenges and opportunities. Abu Dhabi: International Renewable Energy Agency.
MERLIN Deliverable D4.1 I Page 36 5 Briefing for Insurance Sector Mainstreaming aquatic restoration using Nature-based Solutions: Supporting Transformation A collaborative approach with key economic sectors is essential to enable the H2020 MERLIN project to promote systemic transformative change. We will co-develop transformation strategies with different sectors to mainstream restoration as a Nature-based Solution (NbS). Working with nature at landscape scale can contribute to the EU Green Deal objectives (climate resilience, improved biodiversity, zero pollution, sustainable food systems, health, and wellbeing). NbS has been defined by the International Union for Conservation of Nature (IUCN) as “actions to protect, sustainably manage, and restore natural or modified ecosystems, that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits” 1 . This briefing focuses on the Insurance sector. It summarises our understanding of the sector's current connection with rivers and wetlands, and how Nature-based Solutions (NbS) are viewed within the sector at the start of our collaboration. The briefing proposes how MERLIN (more information about the MERLIN project can be found here) can support the Insurance sector to implement NbS. How can MERLIN support transformation? The Insurance sector can play a crucial role in responding to Europe’s Green Deal objectives, particularly climate action. Transformation whereby NbS becomes the new normal will only happen through multiple actions involving government, the private sector, and citizens. MERLIN will support this through understanding why, how, and where the Insurance sector is already making or can lead positive changes, sharing good practice between European countries and exploring how NbS could help overcome some of the challenges faced by the sector. The briefing is based on a range of insights from individuals actively engaged in the Insurance sector from a series of Round Table Discussions (RTDs), questionnaires, structured interviews, and a desktop review of relevant literature. We are very grateful for the insights shared to date, which have helped us understand the different roles and the main potential entry points for transformation. The synthesis provided in this briefing reflects the views of the authors and does not imply consensus within our developing Community of Practice. Our Community of Practice concerns EU and Member State level policy and commercial actors of the Insurance sector who share a common interest in improving their practices better through regular interaction and sharing information. 5.1 Relationship of the Insurance sector with freshwater restoration and NbS 5.1.1 Brief description of the sector The Insurance sector provides risk management products and services through insurance contracts. The basic concept of insurance is that one party, the insurer, guarantees payments for potential future events (like floods or injuries) that would have produced a financial loss for the policyholder. Meanwhile, another party, the insured or the policyholder, pays an insurance premium to the insurer in exchange for that protection on that potential future risk occurrence. There are two main types of insurance: life and non-life. Life and health insurance companies focus on legacy planning and replacing human capital value, and medical costs15. Non-life covers property, casualty, or accident insurance and is aimed at replacing the value of homes, cars, or valuables16. For example, (direct) non-life insurance companies compensate the insured/policyholder for losses (as defined in the insurance contract) due to damage to the insured assets, such as private and commercial buildings/homes, cars etc. MERLIN for example will look at damages incurred by water related events such as floods or droughts. The Insurance sector also offers insurance to cover losses due to business interruption, 3rd party liability and personal injury. The contract (and premium) is normally limited for a one-year-period but can be multi-year if agreed between the policyholder and the insurance company. 5.1.2 How the sector currently understands NbS The Insurance sector is more aware of the term NbS than just 2-3 years ago, when a sector survey confirmed it was not a well-known or understood concept2. Since then, the sector has become much more aware and active in this area, partly due to the work of global insurance (and financial) forums like the new Task force on Naturerelated Financial Disclosure (TNFD)3 and United Nations Environment Programme’s (UNEP) work on Principles for Sustainable Insurance (PSI)4. The TNFD are actively seeking methods to assess impacts, exposure, and
MERLIN Deliverable D4.1 I Page 37 dependencies on ecosystem services and to create a common framework to report and set targets on these areas. The TNFD categorises the nature-related financial risks to be either physical, transitional or systemic5. In addition, policy developments like the EU Sustainable Finance Action Plan17 and the EU Taxonomy on sustainable activities18 have developed a classification system, establishing a list of environmentally sustainable economic activities which include Insurance as a sector. Some insurance companies have actively participated in research projects on NbS and/or are in the process of developing new products and services around NbS. However, the awareness and activities are quite variable within the Insurance sector, although the topic is rapidly being considered higher in the agenda, particularly with the larger more global (direct) insurance companies and reinsurance companies. There are areas where additional technical work is needed. Most insurance companies do not have a full understanding of the technical NbS solutions available to reduce physical climate risk, and to understand the link between physical risk and NbS. This means that new information and data on these linkages would help the Insurance industry to include these solutions into their risk assessment process, tools, models and compensation systems. NbS could be used for risk reduction and as adaptation measures to climate change to reduce exposure and vulnerability to increased hazard extreme events, which would contribute to making sure assets remain insurable. The industry needs a widely accepted framework to describe and quantify the risk reduction effectiveness of nature-based solutions. Such data is crucial to enable insurance companies to use them in their day-to-day business. The sharing of new data will require cooperation between the public and private (Insurance) sector with e.g. the pooling of traditional insurance loss data and data from NbS. Making these data more transparent will be useful to both the industry and public decision-makers. Such cooperation is now included in the EU strategy on climate adaptation which will “encourage at the national level a voluntary approach of public private partnerships for the collection and sharing of loss data based on enhanced cooperation with Member States, cities and industry”6. To mainstream NbS, the insurance experts recommended to look into (1) how can insurance value and support NbS based on their potential for risk reduction and climate change adaptation, and (2) how can NbS be insured based on the economic and ecological value they provide to facilitate update (e.g. to protect the investment in NbS). 5.1.3 NbS and their potential for supporting the sector and good examples of NbS for the Insurance sector The Insurance sector is now looking at how to provide new products and services in relation to NBS. For example, in Spain the Spanish Consorcio de Compensación de Seguros has been sharing loss data to help make better investment decisions e.g., on floodplain restoration in a number of river basins. In Norway the state introduced a legal requirement in 2018 in the building and planning act where the preservation, restoration or establishment of nature-based solutions should be considered (such as existing wetlands and natural streams or new green roofs and walls, artificial streams, and pools, etc.). And if other solutions are chosen, reasons must be given as to why nature-based solutions have not been chosen. In addition, there are examples of the collaboration between public and private actors for both small and large scale NbS. In Holland, Achmea, a Dutch insurance cooperative and mutual holding company, is promoting the installation of green roofs in homes to reduce damages from heavy rainfall7. At the global level, Swiss Re has also collaborated with the State Government of Quintana Roo’s Coastal Zone Management Trust in the Mexican state of Quintana Roo to create an NbS-insurance product to help protect and restore coastal reef damaged from storms or hurricanes, since they provide flood protection during such events8. Another best practice is the MarFund9 where Axa Climate is providing parametric hurricane insurance to four key coral reefs on the Caribbean coast. This means in case of a hurricane crossing the protected areas, a payment is immediately made to carry out emergency response activities. With this type of parametric insurance, the aim is to react very quickly and limit the damage on living ecosystems. One of our MERLIN cases, the Basque country MERLIN case study, looks at the hydro-geomorphological restoration of the Deba River, and includes benefits such as decreased risk of flooding. This is an example of how further work between our MERLIN case studies and the sector will be explored to identify synergies and opportunities. Our MERLIN cases are related to large area restoration on regional and transnational, rural, peri urban and urban locations. These involve transition in land use and floodplain reconnection, targeting flood risk and drought reduction, as well as enhanced compliance with the Birds and Habitats Directive and Water Framework Directive, as well as recreation enhancement. There is also an opportunity thanks to the current draft law on Nature Restoration.
MERLIN Deliverable D4.1 I Page 38 5.2 Challenges and Opportunities of the Insurance sector The Insurance sector consists of non-life, life and reinsurance companies. These therefore provide very different insurance products and are also subject to different regulations. MERLIN has therefore developed a conceptual model that will consider these different types of insurance, like for example non-life insurance which compensates for damages to assets. Below we present some initial results taken from interviews and a Roundtable with Insurance experts. 5.2.1 Challenges From the point of view of policy and regulation: ➔ The Insurance sector is strongly regulated (including on how to calculate the risk.) NbS, nature risk, or nature-related risk, are not terms that are part of, or defined in the insurance regulation (Solvency II directive) in contrast to climate risk. ➔ Each country has their own insurance regulatory set up (public, public-private, private) which means solutions - and how NbS fit into this system - will need to be tailored to their specific context. ➔ From the point of view of products and services (including other sectors): ➔ The sector does not yet use NbS in traditional non-life insurance products, coverages and pricing. To get there, the risk must be calculated to an adequate, risk-based premium which can be set wherever the insured non-life asset is located (e.g. the house in a floodplain area exposed to flooding). In this case, the incorporation of NbS into risk models, poses important questions on the kind of data needed, and what type of data is available. ➔ Furthermore, and also particularly relevant for MERLIN, is the case when third parties incorporate NbS into their insurable assets, e.g. Agriculture, Water Supply and Sanitation, or Navigation. ➔ From the point of view of investment: ➔ It is a changing landscape in relation to the Insurance sector and the consideration of risk reduction measures as part of their role (e.g., river restoration for flood protection). The Insurance sector can incentivize risk reduction in a number of ways like educational programs, the insurance contract, risk engineering services, risk assessment, data-sharing or on occasions as investors, and through public private projects. ➔ The Insurance sector is, however, very aware of the need and urgency to adopt risk reduction measures since otherwise the rise of insurance premiums could lead to affordability issues or even more structural problems like the whole insurability of the system and its long-term viability. ➔ There is a need for accurate cost benefits analysis of NbS to quantify the various losses and damages, exposure and vulnerability, to better understand the causality between NbS and risk reduction that could catalyse a series of actions like e.g. effective communication with funders of these measures or how to upscale them. 5.2.2 Opportunities ➔ The Insurance sector is more aware of their role in the adoption of NbS: 1) as data collectors and how by sharing insurance loss data, better investments can be made to reduce risk 10, 11; 2) through the insurance contract incentives that can be created for the uptake of NbS (conditions; public-private partnerships (PPP) with NbS) through the pricing mechanism like e.g., the reduction of price/premium when customers implement NbS. ➔ The Insurance sector has an increased interest in better defining what and how NbS can be incorporated into insurance products and services, e.g. to help incentivize investment into NbS for risk prevention or with new products e.g. to insure green assets. ➔ The Insurance associations can help by advocating for the awareness, sharing of good practice and use of NbS both within their own sector/members, and towards/in cooperation with public decision-makers in both local (municipalities), regional and national governments. Also with EU and international level, e.g. through Insurance Europe and similar organisations, and in cooperation with other relevant enterprises/SMEs, research institutions and NGOs like WWF. ➔ The current financial regulation Solvency II adopted in 2021 includes the prudential treatment of sustainability risks. The adopted amending regulations require the integration of sustainability risks in the risk management and governance of (re)insurance undertakings. There are some very relevant questions to be further analysed related to MERLIN like “How does this apply to the use of NbS?” or, “How could the EU
MERLIN Deliverable D4.1 I Page 39 taxonomy incentivize the Insurance industry towards developing new sustainable products with the use of NbS for risk reduction/prevention?”. 5.3 Cooperation (MERLIN & the Insurance sector) A conceptual frame will be developed to explore the different ways that Insurance could engage in restoration. For example, how to better define the NbS benefits to use in new insurance products or how natural capital itself could be insured. In the MERLIN project we will focus our work with the sector on the issues in bold: As an example in the first case of new insurance products MERLIN will work with the Insurance sector to: ➔ First, identify how to better adapt risk models to include NbS benefits - larger Insurance companies use natural catastrophe (natcat) models to understand how natural catastrophes can influence their risk (if a loss will occur, and the size/pay out). ➔ Second, explore new products and services - better understand how NbS can “fit” to the insurance products in traditional insurance products and other new risk-transfer solutions, or in new type parametric insurance which “covers the probability of a predefined event happening instead of indemnifying actual loss incurred”12. ➔ Third, undertake joint advocacy workshops/meetings with the sector through key actors like Insurance Europe and national insurance associations to reflect on the main steps taken to implement current initiatives like PSI and TFND to assess their biodiversity impact and dependencies. ➔ Fourth, revise regulatory frameworks to align all instruments - to make it easier to invest in green assets while ensuring access to capital during disasters. This will allow us to move from a broad understanding of the sector to a more focused and therefore in-depth engagement to identify the main barriers and the opportunities. A number of important cross sectoral issues were identified. First, how insurance can help incentivize other sectors to adopt NbS through their own insurance policies to these sectors and second, a direct connection to the Agriculture sector in particular as a particularly vulnerable sector and opportunities for innovative agricultural insurance schemes13. Our policy interviews revealed the need to take a closer look at agriculture to identify examples in this area, as well as to consider farmers as a viable and potential part of the solution. In addition, the potential to understand better how to finance restoration of freshwater with NbS which is more relevant for the life insurance and reinsurance (investment) sectors since their products include long-term investment. This is an area of cooperation between the non/life insurance and the investment world where insurance could help as a de/risking mechanism to attract more investments into e.g. nature conservation or restoration. The non-life insurance sector is based on short (one-year) contracts and with a short investment period, thus there is a need to better understand and/or identify the current Solvency II regulations on any potential constraints, or how the changes included in 202114 will affect the use of NbS in the Insurance sector. Private Investment/financing of restoration is a fairly new discussion, mainly held within international forums like UNEP PSI/FI4 and TNFD3. 5.4 Next Steps Overall, we are building a Community of Practice to support an understanding of NbS and how we can enable the mainstreaming of NbS in the Insurance sector; and also how Insurance can work with other sectors. Together with participants from the six sectors, in the next year we will: ➔ Better understand the EU and international policy framing and the available opportunities and barriers on how current and future policy could enable scaling of restoration and NbS in relation to Insurance. ➔ Continue to engage with the sector to exchange ideas and develop understanding of their needs, challenges, and opportunities for NbS with a specific focus on some use cases with the MERLIN case studies. In the longer term, we will: ➔ Identify opportunities for cross sector partnerships by applying a value chain approach. ➔ Co-develop route maps for transforming the sector's relationship with NbS. ➔ Provide concrete examples on potential innovative insurance schemes and public private collaboration.
MERLIN Deliverable D4.1 I Page 46 2 International Commission for the Protection of the Danube River (2007) Joint Statements on Inland Navigation and Environmental Sustainability in the Danube River Basin. Available here: http://www.icpdr.org/main/activities-projects/joint-statement-navigation-environment 3 PIANC’s Working Group 176 (Guidance on Applying Working with Nature to Navigation Infrastructure Projects (4 September 2018). EnviCom WG 176: Guide for Applying Working with Nature to Navigation Infrastructure Projects (2018). PIANC, The World Association for Waterborne Transport Infrastructure. https://www.pianc.org/publications/envicom/wg176 4 Alexander Zinke (2011): DANUBEPARKS Strategy on Conservation and Navigation. Zinke Environment Consulting for Central and Eastern Europe, Vienna, Available here: https://danubeparks.org/sharepoint/public/1589807376_uploads.pdf 5 Dynamic LIFE Lines Danube project https://www.viadonau.org/en/company/project-database/dynamic-lifelines-danube/overview-of-aims-and-measures 6 Deltares. https://www.deltares.nl/en/ 7 McQuaid, S., Rhodes, ML., Andersson, T., Croci, E., Feichtinger-Hofer, M., Grosjean, M., Lueck, A. E., Kooijman, E., Lucchitta, B., Rizzi, D., Reil, A., Schante, J. (2021) From Nature-Based Solutions to the Nature-Based Economy. https://networknature.eu/sites/default/files/images/NBE%20White%20Paper%20final%20.pdf 8 Regulation (EU) No 1315/2013 of the European Parliament and of the Council of 11 December 2013 on Union guidelines for the development of the trans-European transport network and repealing Decision No 661/2010/EU Text with EEA relevance 9 PLATINA (2010). Manual on Good Practices in Sustainable Waterway Planning. Available here: https://www.icpdr.org/main/resources/manual-good-practices-sustainable-waterway-planning 10 Vadonau. (n.a.) Action Programme Danube Retrieved from: https://www.viadonau.org/en/company/actionprogramme-danube
MERLIN Deliverable D4.1 I Page 47 7 Briefing for Peat Extraction Sector Mainstreaming aquatic restoration using Nature-based Solutions: Supporting Transformation A collaborative approach with key economic sectors is essential to enable the H2020 MERLIN project to promote systemic transformative change. We will co-develop transformation strategies with different sectors to mainstream restoration as a Nature-based Solution (NbS). Working with nature at landscape scale can contribute to the EU Green Deal objectives (climate resilience, improved biodiversity, zero pollution, sustainable food systems, health, and wellbeing). NbS has been defined by the International Union for Conservation of Nature (IUCN) as “actions to protect, sustainably manage, and restore natural or modified ecosystems, that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits.1” This briefing focuses on the Peat Extraction sector. It summarises MERLIN’s understanding of the sector's current connection with rivers and wetlands, and how Nature-based Solutions (NbS) are viewed within the sector at the start of the collaboration. The briefing proposes how MERLIN (more information about the MERLIN project can be found here) can support the Peat Extraction sector to implement NbS. How can MERLIN support transformation? The Peat Extraction sector can play a role in responding to Europe’s Green Deal objectives via biodiversity restoration, wise land use and resource efficiency. Peatlands, in their natural conditions, function as important carbon sinks, which help to store a substantial amount of carbon. Transformation whereby NbS becomes the new normal will only happen through multiple actions involving government, markets, and citizens. MERLIN will support this through understanding how the Peat Extraction sector is already making positive changes, sharing good practice between European countries, and exploring how NbS could help overcome some of the challenges faced by the sector. The activities of Peat Extraction, including licensing and restoration requirements, vary across different European states. However, this briefing presents a general reflection of the European condition, despite the individual state differences. The briefing is based on a range of insights from involving actively engaged individuals from the Peat Extraction sector (using Round Table Discussion (RTDs), questionnaires, interviews) and a desktop review of formal documents. The MERLIN team is very grateful for the insights shared to date, which have helped to understand the different positions. The synthesis provided in this briefing reflects the views of the authors and does not imply consensus within the developing Community of Practice of MERLIN. The Community of Practice concerns EU and Member State level policy and commercial actors of the Peat Extraction sector who share a common interest in improving their practices better through regular interaction and sharing information. 7.1 Relationship of the Peat Extraction sector with freshwater restoration and NbS 7.1.1 Brief description of the sector In Europe, peat extraction is not a major contributor of peatland degradation, as the sector uses a relatively small area of peatlands (0.1%).11 As for the sector’s GHG emissions, there is a data gap regarding their actual contribution, as figures are generalised for all peatland purposes. Yet it is known that peat extraction emissions (onand off-site) are the smallest of all land use type emissions from drained peatlands, lagging behind that of agriculture and forestry. Despite peat extraction’s relatively smaller impact on peatlands, the sector should contribute to the rehabilitation of peatland ecosystems, especially because they have benefited from its prior degradation. The sector could also help to sequester carbon and GHG emissions. Peatlands have a strong natural ability to absorb and store carbon13, playing an important role as an NbS for climate change mitigation. While they only cover around 5% of Europe’s land surface (Figure 1), they store five times more carbon than forests on the continent12. Peatlands consist of a variety of ecosystems which are important habitats for a multitude of species. They are the homes of many adapted, rare and threatened animals and plants, making them unique ecosystems (European Commission, 2020)4. In the EU, peat extraction does not take place on protected or pristine peatlands, unless a historic licence still permits it. Peat is extracted for a variety of purposes, mostly horticulture and energy generation. Extraction mostly takes place in Central Europe, Baltic States and Scandinavia2. The process necessitates removal of the current
MERLIN Deliverable D4.1 I Page 48 vegetation followed by drainage and levelling of the extraction area, harvesting of moist peat, which is later dried on site and transported to be further processed.14, 15 MERLIN acknowledges the important role peat serves e.g. in the need for plants, food, and energy. Therefore, its main focus is the rehabilitation of degraded peatlands in line with NbS. Figure 1. Peatland distribution in Europe (the map shows the relative cover (%) of peat and peat-topped soils in the soil mapping units of the European Soil Database4. Note: this map is for all peatlands in Europe of which peat extraction is a small proportion 7.1.2 NbS and their potential for supporting the sector MERLIN envisages large-scale revegetation, rehabilitation and protection of peatlands as an NbS to enhance restoration of freshwater ecosystems, to reinstate key ecosystem services, and to address societal challenges. There is still a lot of potential for peatland restoration, as the European Commission considers the conservation status of European peatlands still unsatisfactory4. The aim of peatland restoration is to return degraded peatlands to conditions in which ecosystem functions and services, such as carbon sequestration, nutrient dynamics, biodiversity, climate and water regulation, and biomass production, are as close as possible to natural conditions at reasonable cost6. There is a preference to focus peat extraction on degraded, drained or disused peatland (especially that converted to Agriculture (pasture). Therefore, the sector could help with the restoration of these sites and turn an extracted peatland into a carbon sink again. 7.1.3 How the sector currently understands NbS The term NbS is not commonly used by the sector, and NbS standards such as inclusion, transformation potential or biodiversity net-gain are not specifically discussed. However, the after-use procedures implemented by the sector, for example rewetting by blocking drainage channels, building dams and introducing water and peat-forming plants, are all part of an NbS approach. While the methods presently used by the sector for rewetting and restoration are acceptable NbS practices based on individual state regulations, they are not on the scale required by MERLIN. Therefore, discussion will be held on how this transformation may be brought about, because the sector has the equipment and expertise to do so, which could enable the sector to move towards net zero emissions. In the sector, rewetting and rehabilitation are being carried out only at the local level of peat extraction fields, not on a landscape scale, as individual companies are only responsible for their part of their site of extraction.
MERLIN Deliverable D4.1 I Page 49 Hence, the measures are mostly based on the industry’s corporate sustainability practice and regulation requirements, which may differ by each extracting company. Restoration of peatlands is operated on a single site scale according to licensing conditions, if there is a legal requirement to rewet. A peat extraction licence may specify a different after-use, or none at all. If a peatland can no longer be restored, the preferred option of after-use may be forestry, paludiculture, open water wetlands or generation of solar or wind powered energy. The choice selected for after-use will depend on peatland type and former management, landowners’ will as well as on the condition of the ‘used’ peatland. 7.1.4 Good examples of NbS for the Peat Extraction sector Even though more and more peatland restoration projects are conducted in Europe, only a few of them are known to have been led on sites previously extracted by the sector. In this briefing, we chose to include three good restoration examples on peat extraction sites, that are in line with NbS practices. Table 1: Examples of NbS for the Peat Extraction Sector Country, date Lead stakeholders / project Key measures Retrieved from (link) Ireland, since 2021 Bord na Móna: a semi-state owned, former peat extractor, now a climate solutions company, aiming to contribute to the climateneutrality of Ireland ➔ Formally ending all peat harvesting on their lands in 2021 ➔ Over 19700 ha of bog has been rehabilitated to date by the company ➔ Over 79300 ha are planned to be rehabilitated, currently 3127 ha of bog is under rehabilitation https://www.b ordnamona.ie/ bord-namonaannounceformal-end-toall-peatharvesting-onits-lands/ Lithuania, 2013-2017 Lithuanian Ornithological Society Tyruliai - Life: a LIFE project, aiming to restore the Tyruliai bog (which was one of the largest peat mining field in the country) as part of an initiative to the rewetting of Lithuanian peatlands ➔ Ensuring a favourable conservation status of bittern, spotted crake and migratory common crane ➔ Restoration of the hydrological regime in the area of 600 ha ➔ Raising public awareness of restoration possibilities of the destroyed bog http://www.tyr uliailife.lt/upload/u ser_uploads/At askaitos/After_ Life_Conservati on_Plan_FINAL 2.pdf France, 2014-2021 Conservatoire d'espaces naturels de Franche-Comté LIFE Jura peatlands: a LIFE project, aiming to improve the conservation status of habitats in the peat bogs of the Jura Mountains affected by peat extraction - Restoration of 32.6 ha of extraction area 12 Natura 2000 sites - Restoration of 15.1 km of streams on 6 Natura 2000 sites - Purchasing 48.34 ha of strategic areas from private landowners to make it possible to implement appropriate conservation methods across the whole target area https://webgate .ec.europa.eu/lif e/publicWebsite /project/details/ 3947 7.2 Challenges and Opportunities of the Peat Extraction sector 7.2.1 Challenges The sector believes that it would be hard to completely replace peat for horticulture and food production at this stage.9 There is an increasing demand for high-quality growing media, for which peat is still the best mainstream raw material.7 Even though promising alternatives are known, such as coir, bark, compost, biochar8, they are still far from being widely practised. For instance, biochar is still quite small, and mostly needs to be mixed with peat for quality reasons and limited availability. Meanwhile, the sector is more and more urged to make their activities more in line with EU climate and environmental goals. Peat extraction in general has an increasingly negative reputation in Europe because it is linked with carbon emissions and biodiversity loss. As mentioned above, it
MERLIN Deliverable D4.1 I Page 50 concerns a relatively small proportion of peatlands, yet, the sector uses degraded peatlands where biodiversity otherwise could be restored. Restoration itself is challenging, primarily because degraded mire ecosystems have a very slow reaction to such measures. If these are successful, it can take several decades for ecosystems to improve their conservation status.4 Moreover, peat extraction licences are vague on details of restoration: apart from it being a requirement, there are no specifications in many cases. Rewetting is still a common practice, which is problematic, because not all extracted peatlands are suitable for rewetting depending on underlying soil, cutover topography, and water availability. This practice alone does not create functioning peatlands either without proper rehabilitation, and revegetation measures. Restoration would be more efficient if it was not only focused on a single site scale where peat extraction happened, but on a large-scale landscape scale. This is contested by the fact that extraction companies are not responsible for going beyond their own sites. There are also some companies who are legally extracting on protected lands, as they received their licence before regulations have taken place, and these licences could be viable even after decades. Overcoming regulatory bureaucracy and the fragmented policy framework across Europe is challenging as well. Different countries have their own conditions for peat extraction and peatland restoration, while some EU policies contradict each other on these matters. 7.2.2 Opportunities Biodiversity may be enhanced or recovered after Peat Extraction ends if appropriate rehabilitation and revegetation measures are implemented16. The other main driver behind peatland restoration is that restored peatlands can store more carbon than degraded ones, therefore they have a part to play in emissions absorption17. In some European areas, applying NbS to peatland restoration also has the potential to mitigate flooding, as it would retain floodwaters, reduce flood peaks and consequently, safeguard urban areas and communities. Furthermore, as can be seen from the Irish Bord na Móna example from above, restoration can provide employment in rural areas or for those who previously worked on peat extraction within the company. Additionally, restoring peatlands can have a positive impact on local tourism and offer recreational opportunities. Positive solutions such as bog bridges and boardwalks already exist on several peatlands, also serving as an educational element, which is well-needed, since the value and benefits of wet peatlands are still largely underestimated.12 Therefore, restoration can contribute to achieving the Sustainable Development Goals as well, since it can result in peatlands offering a clean and reliable source of water, helping generate economic benefits and reduce exposure and vulnerability to disasters.5 Restoring its good reputation through applying NbS could be a motivating aspect for the sector. Especially because in Europe, peatlands are the most degraded ecosystems,10 therefore, there is a huge potential for the sector to contribute to changing this. Rehabilitation and revegetation of peatlands is a business opportunity for the industry, given that companies are motivated to undertake peatland restoration as a corporate and social responsibility. Thereby, they are applying for ‘best practice’ certification that includes commitment to restore sites when extraction ends. Peat extraction companies have the machinery and knowledge for peatland restoration, which, with the appropriate regulatory environment and finance, could be upscaled to the landscape level. 7.3 Cooperation (MERLIN & the Peat Extraction sector) Regardless of peat extraction’s coverage of peatlands in Europe, the sector could play a significant role in addressing environmental challenges respective to the sector. MERLIN needs to base suggestions on transformation and mainstreaming on practical experience and evidence-based learning. Whilst many different aspects of how the Peat Extraction sector might mainstream NbS were discussed, we would like to focus on revegetation not just on-site rewetting and linking the extraction sites to wider peatland restoration approaches. In the MERLIN project we will focus our work with the sector on the issues in bold: ➔ Provide information and training on how to revegetate sites and sustain the vegetation through appropriate after-use site management ➔ Enable large-scale restoration beyond sites of peat extraction to the wider landscape level, since companies have the tools and expertise that could be upscaled. This would ensure that NbS standards are met and that NbS is implemented not only on peat extraction fields, but at a landscape level as well, in cooperation with other sectors.
MERLIN Deliverable D4.1 I Page 51 ➔ Enhance cooperation between peat extraction industry and other stakeholders including public agencies and other private organisations, to fund NbS projects at a landscape level and tap into the skills, knowledge, and equipment of the industry to mainstream NbS. ➔ Share innovative funding mechanisms and business approaches for a wider peatland restoration that involves the sector, in order to increase financial motivation for restoration. For instance, blue carbon credits can incentivise peatland restoration, as their generation is based on the tonnes of carbon captured and stored by the project, and these credits can later be sold to larger entities wishing to offset their GHG emissions. ➔ Calculate, if possible, GHG emissions from extracted peatlands and methodologies for achieving net zero emissions in the sector. ➔ Help improve planning and licence processes to overcome the regulatory bureaucracy, which hinders the appropriate restoration of peatlands following extraction. MERLIN could serve as an intermediary between the peat extraction companies and various state regulators to facilitate the transformation process, with the aim to make the licences clearer with regards to restoration. For cross sectoral cooperation, the relationship between the peat extraction sector and freshwater NbS has to be understood. In general all the MERLIN sectors (Hydropower, Navigation, Peat Extraction, Agriculture, Insurance) rely on the others to manage water resources better, to avoid floods and droughts to keep operating profitably. Peat extraction is directly related to parts of Agriculture, such as Horticulture, and through rewetting, it can help with water levels for Insurance, Hydropower, Navigation and Water Supply and Sanitation. According to the MERLIN Case Studies (CS14), restoration of Peat Extraction helps treat water quality. The industry could also support and help the restoration of wetlands on peat-based habitats used for Agriculture. 7.4 Next Steps Overall, MERLIN is building a Community of Practice to support an understanding of NbS and how MERLIN can enable the mainstreaming of NbS in the Peat Extraction sector; as well as how Peat Extraction can work with other sectors. Together with participants from the six sectors, in the next year MERLIN will: ➔ Continue to engage with the sector to exchange ideas and develop understanding of their needs, challenges, and opportunities for NbS ➔ Examine the EU policy context and how in the future policy could better enable NbS. ➔ Incorporate issues of social justice alongside ecological and economic considerations in the process to mainstream NbS within the sector. In the longer term, MERLIN will: ➔ Identify opportunities for cross sector partnerships by applying a value chain approach. ➔ Co-develop route maps for transforming the sector's relationship with NbS. For more information on how MERLIN will collaborate with the sectors’ representatives or to discuss how they can help MERLIN, please contact [email protected] or [email protected]. 7.5 References 1 Cohen-Shacham, E., Walters, G., Janzen, C., & Maginnis, S. (2016). Nature-based solutions to address global societal challenges. IUCN: Gland, Switzerland, 97, 2016-2036. 2 Schmilewski, G. (2008). Socio-economic impact of the peat and growing media industry on horticulture in the EU. European Peat and Growing Media Association (EPAGMA): Saterland-Sedelsberg, Germany. 3 Montanarella, Luca & R.J.A, Jones & R, Hiederer. (2006). The distribution of peatland in Europe. Mires and Peat. 4 European Commission. (2020). Peatlands For Life. Luxembourg: Publications Office of the European Union. Available at https://cinea.ec.europa.eu/system/files/2021-02/PeatlandsforLIFE-19062020.pdf. 5 Tanneberger, F., Appulo, L., Ewert, S., Lakner, S., Ó Brolcháin, N., Peters, J., & Wichtmann, W. (2021a). The power of nature‐based solutions: how peatlands can help us to achieve key EU sustainability objectives. Advanced Sustainable Systems, 5(1), 2000146.
MERLIN Deliverable D4.1 I Page 52 6 Clarke, D., & Rieley, J. (2019). Strategy for responsible peatland management: International Peat Society Finland. Available at https://peatlands.org/assets/uploads/2019/10/srpm2019finalforprint.pdf. 7 LIFE Peat Restore. (2021). Panel Discussion – Peatlands for Climate. Available at https://www.mediafire.com/file/ncmcx1glk7to73q/Peat_round_table_summary.pdf/file. 8 International Biochar Initiative (2015). Standardized Product Definition and Product Testing Guidelines for Biochar That Is Used in Soil. Biochar = “the solid material obtained from the thermochemical conversion of biomass in an oxygen-limited environment. Retrieved from: https://www.biochar-international.org/wpcontent/uploads/2018/04/IBI_Biochar_Standards_V2.1_Final.pdf. 9 Jindo, K., Sánchez-Monedero, M.A., Mastrolonardo, G. (2020). Role of biochar in promoting circular economy in the agriculture sector. Part 2: A review of the biochar roles in growing media, composting and as soil amendment. Chem. Biol. Technol. Agric. 7, 16. 10 Maes, J., Teller, A., Erhard, M., Condé, S., Vallecillo, S., Barredo, J. I., . . . Santos-Martín, F. (2020). Mapping and Assessment of Ecosystems and their Services: An EU ecosystem assessment, (EUR 30161 EN). Retrieved from Ispra. [online] Available at https://ec.europa.eu/environment/nature/knowledge/ecosystem_assessment/index_en.htm. 11 World Energy Council. (2013). World Energy Resources: Peat. Retrieved from https://www.worldenergy.org/assets/images/imported/2013/10/WER_2013_6_Peat.pdf. 12 De La Haye., et al. (2021) Peatlands Across Europe: Innovation & Inspiration, Barcelona, Bax & Company. Retrieved from: https://life-peat-restore.eu/en/wp-content/uploads/sites/7/2021/06/web-version-peatlandsacross-europe.pdf. 13 Artz, R.R.E., Donnelly, D., Andersen, R., Mitchell, R., Chapman, S.J., Smith, J., Smith, P., Cummins, R., Balana, B. and Cuthbert, A. 2014. Managing and restoring blanket bog to benefit biodiversity and carbon balance – a scoping study. Scottish Natural Heritage Commissioned Report No. 562. 14 Bos, M.G., W.H. Diemont and A. Verhagen (eds.). Sustainable Peat Supply Chain; Report of the ad hoc working group Enhancing the Sustainability of the Peat Supply Chain for the Dutch Horticulture. Wageningen, Alterra, Alterra report 2167. 132 pp.; 2 fig.; 1 tab.; 7 ref. 15 Joosten, H., & Clarke, D. (2002). Wise use of mires and peatlands. International Mire Conservation Group and International Peat Society, 304. 16 Räsänen, A., Albrecht, E., Annala, M., Aro, L., Laine, A. M., Maanavilja, L., . . . Tarvainen, O. (2023). After-use of peat extraction sites–A systematic review of biodiversity, climate, hydrological and social impacts. Science of The Total Environment, 163583. 17 Krigere, I. (2019). Peat resources in Latvia and EU: their role in national economy. Paper presented at the 2019 International Peat Symposium and 1st China International Peat Expo. http://www.latvijaskudra.lv/upload/prezentacijas/i.krigere_chainaxx.pdf
MERLIN Deliverable D4.1 I Page 53 8 Briefing for Water Supply and Sanitation Sector Mainstreaming aquatic restoration using Nature-based Solutions: Supporting Transformation A collaborative approach with key economic sectors d is essential to enable the H2020 MERLIN project to promote systemic transformative change. We will co-develop transformation strategies with different sectors to mainstream restoration as a Nature-based Solution (NbS). Working with nature at landscape scale can contribute to the EU Green Deal objectives (climate resilience, improved biodiversity, zero pollution, sustainable food systems, health, and wellbeing). NbS has been defined by the International Union for Conservation of Nature (IUCN) as “actions to protect, sustainably manage, and restore natural or modified ecosystems, that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits” 1 . This briefing focuses on the Water Supply and Sanitation (WSS) Sector. It summarises our understanding of the sector's current connection with rivers and wetlands, and how Nature-based Solutions (NbS) are viewed within the sector at the start of our collaboration. The briefing proposes how MERLIN can (more information about the MERLIN project can be found here) support the WSS sector to implement NbS. How can MERLIN support transformation? The Water Supply and Sanitation Sector (WSS) can play a crucial role in responding to Europe’s Green Deal objectives, particularly secure supplies of clean water. Transformation whereby NbS becomes the new normal will only happen through multiple actions involving government, markets, and citizens. MERLIN will support this through understanding how and why the WSS sector is already making positive changes, sharing good practice between European countries, and exploring how NbS could help overcome some of the challenges faced by the sector. The briefing is based on a range of insights from involving individuals actively engaged in the WSS sector (using Round Table Discussions (RTDs), questionnaires, interviews) and a desktop review of formal documents. We are very grateful for the insights shared to date, which have helped us understand the different positions. The synthesis provided in this briefing reflects the views of the authors and does not imply consensus within our developing Community of Practice. Our Community of Practice concerns EU and Member State level policy and commercial actors of the WSS sector who share a common interest in improving their practices better through regular interaction and sharing information. 8.1 Relationship of the WSS sector with freshwater restoration and NbS 8.1.1 Brief description of the sector The WSS sector oversees drinking water and wastewater activities (including wastewater treatment) for households, industrial, agriculture and commercial customers. In Europe public utilities and private operators are in charge of Water Supply and Sanitation and sewage networks and wastewater treatment plants. MERLIN’s focus is on upstream restoration to preserve water supply and will therefore entail working together with the sector on the availability of drinking water in a landscape context, mainly in rural areas. To represent the perspective of the public and private operators from the WSS Sector and the sector relationship with NbS, it was important to involve a group of sector leaders who were invited to participate in the first roundtable organised by the MERLIN team. The group consists of representatives from Aquafed and Aqualia (representing the views of private operators), Aqua Publica Europea (the European association of public water operators and representatives), and representatives from the European Water Managers Association (EUWMA).
MERLIN Deliverable D4.1 I Page 54 Figure 1: NbS for lowering flood risk in different river sections. Adapted from the Norwegian Environment Agency2 There are many different types of NbS that can be used in the water sector, as seen in Figure 12. However, to address some of the main environmental and socio-economic challenges that the sector is facing (such as water scarcity, flooding, water quality, etc.) some of the proposed NbS are the following: ➔ Development of freshwater wetland and restoration efforts that focus on improving flood management capacity while providing water treatment services such as filtration and pollutant trapping. These actions aim to renew sediment profiles, introducing and creating conditions for autochthone species and return of natural habitats. This can in turn address the impact of soil and water conditions on nutrient dynamics and ecosystem services. ➔ To reduce flood infrastructure risks, restoring wetland forests3 in areas with low flood waves is suggested. Combining wetland trees and shrubs with traditional levees and embankments made from earthen barriers4 can reduce wave heights, provide habitat value, and support biodiversity. ➔ Developing inland buffer zones within regional water systems in order to buffer both floods and drought conditions and allow flexible stormwater capacity. ➔ Creating freshwater habitats through conservation and restoration of wetlands to increase the biodiversity net gain. Conserving and restoring wetlands also increase the buffering and filtering capacity of adjacent land, improving both water quality and quantity. ➔ Using NbS for water storage combined with integrated watershed management for stormwater or wastewater allows improved infiltration in the ground. The potential to link urban water resources may have the potential to ease water pressures and promote biodiversity. 8.1.2 NbS and their potential for supporting the sector, How the sector currently understands NbS The sector often addresses the NbS as “green” solutions to solve the current challenges. Water managers are increasingly asked to integrate ‘green’ approaches into WSS and treatment practices. “Green” technologies - which are believed to offer environmentally conscientious, energy-efficient, and/ or increasingly economically viable solutions to address challenges - are generally understood to complement and sometimes replace more traditional ‘grey technologies’. The most common application of NbS in the WSS sector is to handle water overflows during intense rainfall events, when the current infrastructure cannot cope.
MERLIN Deliverable D4.1 I Page 55 The sector seems interested in NbS upstream to protect resources, particularly with increased potential for drought under climate change, but this is often large-scale ecosystem intervention that is difficult for water companies to deliver on their own. It is important to mention that public and private operators look at water management and implementation of NbS in a different perspective. Public operators believe that the management of water belongs in the public domain and that all the revenues generated from water management services should be reinvested in the water cycle, while private operators advocate for the benefits of public-private partnerships. Even though both perspectives support sustainable use of water resources, MERLIN should aim to tackle all sides of the story so that investment decisions can be made with more certainty. 8.1.3 Good examples of NbS for the WSS sector ➔ Anglian Water5 - A biodiverse wetland to treat effluents. Prioritising natural capital approaches Anglian Water is the largest water and water recycling company by geographic area in England and Wales, committed to solving environmental problems at source and water quality threats prompted evaluation of nature-based approaches to water management. The Anglian Water case study demonstrates how NbS projects can actually save money for business and customers. Their experience showcases the critical role of customer engagement and how strengthening the relationship between utilities and the general public can create avenues to prioritise natural capital approaches. ➔ De Watergroep-Catchment protection through ecosystem restoration6De Watergroep is the largest drinking water supplier in the Flanders region of Belgium. In the densely populated and cultivated region of Flanders, investing in the long-term protection of these water supplies through nature-based solutions (NBS) is a means of addressing serious water quality issues stemming from agricultural and industrial pollution. De Watergroep tackles pollution threats from the increased threat of nutrient and pesticide leaching into surface water supplies and a diminished dilution of chloride coming from industrial discharges, by focusing NbS on the protection and enhancement of the ecosystems that surround their abstraction areas. ➔ Skanderborg ForsyningClimate Change adaptation using Nature-based Solutions7 - The Danish water utility Skanderborg Forsyning affirms that when it comes to water security in a changing climate, using naturebased solutions at the local level was never a question. In recent years, the municipality of Skanderborg, has experienced increasing and more frequent rainfall resulting in extensive flooding of urban areas. Rainwater accumulation can lead to sewage overflow and surface water quality degradation, impacts that will be exacerbated by the onset of climate change. Climate change projects are an opportunity to adapt using nature to deal with increased rainfalls and prevent the flooding of urban areas. 8.2 Challenges and Opportunities of the WSS sector The WS sector grasps the potential of NbS but would like to have more specific cases as examples to illustrate how NbS can preserve resources, reduce investment (NbS are often cheaper in the long term than traditional engineering) and also reduce energy and carbon footprints. There are certain barriers in mainstreaming restoration and NbS in the sector, consisting of challenges such as: ➔ Knowledge and information gaps: limited data on river flows, as well as evidence on the value of freshwater and terrestrial ecosystems brings a lack of knowledge on the costs and benefits, technologies, markets, and financial products associated with NBS. The absence of available best practices and expertise for investors creates uncertainty related to bidding processes. ➔ Administrative: NBS often combine different scales in urban water management, from individual buildings to municipal and larger levels which require work implication from different authorities and institutions. ➔ Financial gaps: lack of funding resources for large scale restoration projects, construction, rehabilitation, or operation & maintenance. ➔ The opportunities that could promote NbS in the sector are related at first to understanding the benefits of NbS versus traditional engineering in urban water management. There is a green solution opportunity towards each urban management issue. To address the complexity of these issues - technical, financial, administrative; various policy, regulatory and financing opportunities have been developed. ➔ The socio-economic benefits of NbS may seem to outweigh its financial benefits,8 but it is of utmost importance for the WSS sector to additionally recognize the financial benefits in investing in NbS. In general, where NbS were implemented, successes were observed with generally less intensive capital outflow, and an appreciation in value over time with the regeneration of the ecosystem services.9
MERLIN Deliverable D4.1 I Page 62 Sector Total number of sector interviewees per organisation type (including DGs) Public Private (commerci al) Publicprivate partnership NGO Network Other (e.g. academic, etc) Agriculture 9 7 0 1 1 5 Hydropower 0 0 0 0 0 0 Insurance 4 2 0 0 0 0 Navigation 1 0 0 0 0 0 Peat Extraction 0 0 0 0 0 1 Water Supply and Sanitation 3 0 0 0 0 0 Cross-sector 8 0 0 0 0 0 Sector Total number of sector interviewees per organisation scale (Including DGs) National Regional Europe International Other (e.g. local) Agriculture 9 0 7 2 5 Hydropower 0 0 0 0 0 Insurance 3 0 3 0 0 Navigation 0 0 1 0 0 Peat Extraction 1 0 0 0 0 Water Supply and Sanitation 0 0 3 0 0 Cross-sector 0 0 8 0 0
MERLIN Deliverable D4.1 I Page 63 Annex 3: Replies to reviewers’ comments Reviewers’ comments Reply Tables of interviewees, RTD participants etc would be helpful, in an Annex – even as basic summaries (country, practice-sector, role, public/ private/academic etc). It would be helpful to document this, in order to supplement evidence regarding the benefits of NBS to each sector. During the review meeting it was discussed whether the methods were set out in the questionnaire report or the 6 sectoral briefings, and it was confirmed that they are not covered (at this stage). As in D2.1 all the qualitative information from the workshops/ surveys is indirect. There are not direct quotes from the industry representatives involved in the workshops/surveys. JHI (Hassan) have prepared new Annexes with the requested information, see Annex 1 and 2 The critical element of cost-benefit analysis does not receive much attention or discussion, beyond some important introductions: • P25. “Where farmers are managing their environments well, they believe they are not receiving due market value for these actions. Therefore, the whole food value chain - determined by the market, demands and cost - can play a significant role in valorising NbS. “ • P28.” NbS could support the emergence of new value chains particularly making more market value from good environmental stewardship of water on farms and across the basin - including using existing certification to increase visibility or gain premiums from the buyer. “ However, it is well noted that the CBA is the topic of a separate deliverable and milestone. As it was noted by the reviewers the CBA work will be done in a separate deliverable in WP3 (T3.5) and not in WP4. In Deliverable 4.4 about value chains WP4 will build upon the results of this work. Some details from WP3 colleagues (Nicolas) responsible for CBA: What will be done: 5 CBAs in selected basins. 3 already selected (Rhine, Sorraia, Forth), 2 still to be confirmed (likely to be Tisza and Finland). Quantification and valuation of Ecosystem Services delivered by NbS: nutrients and sediment retention, flood and drought risks reduction, carbon sequestration, nature recreation, food and biomass provision (list to be fine-tuned based on priorities in each basin). When we might get some results: - Rhine: end 2023 - Sorraia and Forth: 2024 - 2 others: 2024/2025 Connection to sectors: Agriculture: benefits to farmers in terms of flood/drought risk mitigation, analysis of trade-offs taking land out of production/benefits from NbS. Water supply and sanitation: benefits to the sector in terms of water quality improvement (nutrients removal, reduced sedimentation) Insurance: demonstration of benefits of NbS on flood & drought risks reduction For the 3 other sectors, hydropower, navigation, peat extraction, the connection is less clear. Regarding the topics highlighted by the reviewers, i.e. making more market value from good environmental stewardship in the food value chains, I think it is beyond the scope of what we are planning in the CBA. Several elements of the desktop review findings did not cite primary data sources, across all sector analyses. This is understandable for the final versions of briefings which need to be kept punchy, but for a report of this length one might hope to see more referencing. Hopefully the source material has been kept and can be re-incorporated. This is particularly important where statistics and headline figures are given. Referencing has been added, where necessary (pages 34 and 40). p.27 “Monitoring and performance assessment: the indicators used for the monitoring, the identity of people conducting the monitoring, the way performance should be rewarded - are still unknown.“ Unknown to whom? textual change p. 25: “Monitoring and performance assessment: the indicators used for the monitoring, the identity of people conducting the monitoring, the way performance should be rewarded - are often not properly defined.” The reports intended audience i.e. Communities of Practice is not really defined in the document. As a result it is slightly difficult to The cross sectoral briefing (Chapter 2) defines our community of practice. It varies between the six sectors;
MERLIN Deliverable D4.1 I Page 64 judge what kinds of people are to be targeted with the briefings, and hence what channels, messages are appropriate. E.g. commercial actors of the WSS sector – very diverse group encompassing consultants, construction side, infrastructure systems planners, operators, trades, thought leaders, representative bodies etc. Perhaps this could be addressed by cross-referencing the challenges, examples and recommendations with specific target audience/ stakeholders. therefore we decided not to define the concept more. The COP evolves parallel with the project. ‘Our Community of Practice concerns EU and Member State level policy and commercial actors who share a common interest in improving their practices better through regular interaction and sharing information.’ P34 "MERLIN needs to base suggestions on transformation and mainstreaming on practical experience". Does this mean practical experience alone? Or in conjunction with other evidence? Why is this justified? The briefings can provide useful high-level overviews and addressing these modest downsides would be worthwhile to enable the briefings to be used to support wider project impact, through external dissemination. A final point is that it is great to see that Merlin builds on existing processes and assets e.g. Agricultural European Innovation Partnership (EIPAGRI). This introductory text is in all the sectoral briefings by the cooperation points. MERLIN builds on the practical experience of the 18 Merlin case studies and on other good practices from freshwater NbS.